Page last updated at 20:27 GMT, Monday, 26 May 2008 21:27 UK

Nigeria attacks boost oil price

Nigerian militants

Crude oil prices rose after reports of attacks on a pipeline in Nigeria stoked fresh supply concerns.

US light, sweet crude gained $1.27 cents to reach $133.46, while London Brent added $1.23 to $132.80.

It has been a volatile few sessions for US crude, which peaked at $135.09 on Thursday before falling back to $130.81 in a rush of profit-taking.

Oil prices have doubled in the past year, lifted by supply fears, a weak US dollar and speculators.

Supply fears have been exacerbated by claims from a Nigerian anti-government group, the Movement for the Emancipation of the Niger Delta, said it had sabotaged a Royal Dutch Shell pipeline.

Shell said it was investigating the claims.

Nigeria is the world's eighth largest oil exporter and the largest in Africa, but since 2006 militants have targeted the country's oil infrastructure and oil production has been cut by a quarter.

Sensitive market

Oil's record-busting run has also been supported by the stagnating US economy and a weak US dollar that has seen investors sell the currency for oil, which they consider to be a more attractive investment.

"It's very much the US currency at play," said Mark Pervan, an analyst at the Australia & New Zealand Bank.

"The market is reassessing the dollar and has probably taken the view that the dollar hasn't bottomed out and may fall further," he added.

A raft of US economic data is due out later this week, which investors will closely watch for their implications on the world's largest economy.

Producers' cartel Opec has refused to increase production any further, convinced that speculators are to blame for runaway oil prices rather than supply problems.

In an interview with the Daily Telegraph, billionaire investor George Soros agreed with this stance, calling the record price of oil a bubble that will only burst when the US and the UK are both in recession.

In the same newspaper, it was also reported that German politicians were poised to call for a ban on oil trading by speculators.

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