Saturday, June 21, 2008

Oil rises above $134 on Mid East, Nigeria tensions

Oil prices climbed above $ 134 a barrel Friday as fresh tensions arise out in the Middle East and Nigeria amidst report of possible supply interruptions.

Weaker dollar also enhanced the appeal of commodities as a currency hedge as the jump preceded an international meeting of government officials and oil executives in Saudi Arabia, this weekend to discuss the factors behind record-high oil prices.

Light, sweet crude for July delivery settled up $2.69, or 2 per cent, at $134.62 a barrel on the New York Mercantile Exchange. The July contract expired on Friday. More actively traded August crude settled at $135.36 a barrel, up $2.76.

Brent crude oil for August settlement rose $2.86, or 2.2%, to settle at $134.86 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 on June 16.

Oil extended gains after Royal Dutch Shell Plc suspended export obligations for its Bonga crude oil after a militant attack halted production at the offshore field yesterday. Shell shut Bonga after the attack on a production vessel at the field, 120 kilometers off the coast of Nigeria.

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