Oil's just a whisker away from $120

LONDON: Oil prices hit a historic peak close to $120 on Monday after a strike at a key British refinery slashed North Sea output and heightened global supply concerns. New York���s main oil futures contract, light sweet crude for June delivery, touched $119.93 in early Asian trade, beating last Thursday���s previous high of $119.90. The contract later stood at $119.21, up 69 cents from Friday. London���s Brent North Sea crude for June rose 72 cents to $117.06 on Monday after striking an all-time high of $117.56 on Friday.

Industrial action at the Grangemouth refinery has forced British energy giant BP to shut down the neighbouring Forties pipeline which supplies 40% of the country���s oil and gas. Around 1,200 workers are staging a two-day walkout, which began on Sunday, in a dispute over proposed changes to their pension rights. The strike has sparked panic buying of motor fuel in parts of the UK. The Forties pipeline brings more than 7,00,000 barrels of crude oil ashore every day and supplies the UK and international markets. It cannot function without power and steam from Grangemouth.

Prices rallied on Friday as the Grangemouth plant was shut down ahead of the strike. ���Supply worries have pushed oil prices higher since Friday and will remain the dominant influence on prices in the near term,��� said Commonwealth Bank of Australia commodity strategist David Moore in Sydney.

Disruptions in crude supplies are ���potentially quite significant,��� Mr Moore said. ���The loss of crude oil from Scotland is quite material in the context of the oil market,��� he added. Over the past two weeks, crude prices have smashed through a series of record highs, sparking widespread international concern among consumer nations. The market has also been supported by a weak dollar, tightening global supplies, ongoing unrest in key African producer Nigeria and the Opec cartel���s refusal to increase output, according to traders.