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World oil price near record highs

business Updated: May 07, 2008 13:04 IST

World oil traded only a little below $ 122 per barrel on Wednesday after concerns over supply in key producer Nigeria helped push prices to record highs in frenzied trading, dealers said.

New York's main oil futures contract, light sweet crude for June delivery, was 21 cents lower at $ 121.63 in afternoon Asian trade.

The contract closed on the New York Mercantile Exchange on Tuesday at a record high of $ 121.84 after leaping to $ 122.73, an all-time intra-day high.

Brent North Sea crude for June fell 15 cents to $ 120.16 per barrel. The contract had earlier reached a new peak of $ 120.99 before settling at a record closing high of 120.31 yesterday in London.

Runaway oil prices have almost doubled in the past year and have surged by more than $ 20 since the start of 2008.
David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney, said sentiment remained buoyant after yesterday's sharp gains.

"While issues on the supply side are being progressively resolved... They highlight the risks of oil production going forward," said Moore.

The supply disruptions in Nigeria have been important but there have been indications they will be resolved, he said.

Nigerian militants attacked an oil ship off the coast of the west African country and took two people hostage over the weekend, a military spokesman said on Sunday.

The incident on Saturday came after an attack on Shell oil wells and a flow station in southern Bayelsa state, leading to a cut in the company's output.