Oil hits record high $126.40

LONDON: The price of crude oil struck a record high 126.40 dollars a barrel on Monday amid tensions in the Middle East and ongoing supply fears in Nigeria, traders said.

New York crude beat its all-time peak of 126.27 dollars, reached last Friday.

Later Monday, New York's main oil futures contract, light sweet crude for June delivery, stood at 125.48 dollars per barrel, down 48 cents from Friday's close as profit-taking set in.

On Monday, London's Brent crude contract for June delivery dropped by 1.23 dollars to 124.17 dollars. It had set a historic peak of 125.90 dollars per barrel on Friday.

"The bullish tone in the oil market persists with geopolitical factors supporting," Bank of Ireland analyst Paul Harris said on Monday.

"Fresh air strikes by Turkey in northern Iraq and continued civil unrest in Lebanon helps to maintain the focus upon supply issues."

Oil prices have doubled since the same stage last year when they stood at just 62 dollars. They crashed through records every day last week and have rocketed by 25 percent since the start of the year, when they broke the 100-dollar barrier.

Analysts cite a variety of factors for the price spikes, including rising energy demand from Asian powerhouse economies China and India, a weak US dollar and OPEC's refusal to pump more crude. The market also remains supported by ongoing supply disruptions in Nigeria, which is Africa's biggest exporter of crude.

Oil major Royal Dutch Shell said Saturday it was losing the equivalent of 30,000 barrels of crude oil per day because of recent attacks against its installations in Nigeria.

"That's quite a big, significant impact, especially in the US, because the oil is quite good quality," said Tetsu Emori, a fund manager with Astmax asset management.

Anglo-Dutch oil group Shell, Nigeria's largest oil operator, accounts for around half the country's 2.1 million barrels per day output.

The 13-member Organization of the Petroleum Exporting Countries (OPEC), of which Nigeria is a member, produces about 40 percent of the world's oil, with current output at about 32 million barrels per day.

Oil prices have meanwhile raced higher in recent days despite news last Wednesday that US energy stockpiles had risen by a bigger than expected amount earlier this months.