Crude oil prices spike above $117 a barrel

NEW YORK: Crude oil prices set a new record on Monday, spiking above $117 a barrel after an attack on a Japanese oil tanker in the Middle East.

Light, sweet crude for May delivery rose to a record $117.60 a barrel on the New York Mercantile Exchange but later fell back to $116.29, down 40 cents from Friday's close.

Retail gasoline prices, meanwhile, hit another milestone on Monday, tightening the squeeze on drivers by jumping to an average $3.50 a gallon (92 cents a liter) at filling stations across the US. Nationally, retail gas prices are up 23 percent from a year earlier.

Crude prices came under increased pressure Monday after the 150,000-ton tanker Takayama was struck off the coast of Yemen as it headed for Saudi Arabia, its Japanese operator, Nippon Yusen K K, said in a statement posted on its Web site.

None of the ship's 23 crew members was injured, but several hundreds of gallons of fuel leaked before a 1-inch (2.5-centimeter) hole in the tanker's stern was repaired, the company said. Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat.

"There's clearly some geopolitical tension in the market," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia. "This will die down, but the market is pretty jittery at the moment."

Adding to the worries were claims Monday from the main militant group in Nigeria's restive south that it had launched two more attacks on oil pipelines in the region. Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the US.

Comments over the weekend by an OPEC official that the group was not likely to increase production also supported prices Monday. Abdalla Salem el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply, something he doubted.

"Oil prices, there is a common understanding that has nothing to do with supply and demand," el-Badri said on the sidelines of an energy conference in Rome.

In other Nymex trading, heating oil futures fell 0.49 cents to $3.2874 a gallon while gasoline futures fell 2.52 cents to $2.9641 a gallon. Natural gas futures rose 6.3 cents to $10.65 per 1,000 cubic feet.