Oil prices edge near $120

28 April 2008

The stoppage of North Sea oil production has sent the price of a barrel to a record high of nearly $120 (£60.40).

According to reports, the price of US light crude rose to $119.93 in early trading before dropping slightly to $119.40. Meanwhile, the price of Brent in London has risen to $117.17.

BP's Forties pipeline, which normally produces 700,000 barrels a day, has temporarily ceased production as a result of the two-day strike at the Grangemouth refinery in Scotland.

"Supply side concerns underpinned the oil price," said David Moore, a commodity strategist at the Commonwealth Bank of Australia.

He said the pensions strike at the refinery in Scotland has caused "significant disruption".

The action in Scotland comes as tensions rise in Nigeria, which has suffered numerous attacks on its oil facilities. Five policemen were shot dead in the south of the country at the weekend.

Moreover, the stand-off between the US and Iran, and a perception that oil is not going to get any cheaper, is also adding a climate of fear on the trading floors.

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