BUSINESS
Oil prices hit record on supply concerns
Oil prices hit an all-time high near $120 a barrel April 28 after a weekend refinery strike closed a pipeline system that delivers a third of Britain's North Sea oil to refineries in the U.K.
The shutdown comes amid other supply outages in Nigeria that have helped to support oil against a strengthening dollar.
"We've got a confluence of a number of events that have really disrupted crude oil supply," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "That's what's driving oil to a new record even though the dollar actually strengthened a bit."
BP PLC on April 27 shut down the Forties Pipeline System that carries more than 700,000 barrels of oil a day to the U.K. because of a 48-hour walkout by employees at a refinery in central Scotland.
Workers ended a two-day strike April 29 after walking out of the Grangemouth refinery vowing not to give ground in their dispute with owner Ineos over plans to close a generous pension scheme to new employees.
In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said its fighters hit an oil pipeline April 24, the fourth conduit the group has attacked in recent weeks. MEND said the pipeline belongs to a Royal Dutch Shell PLC joint venture.
The oil market is also expected to closely watch the outcome of the U.S. Federal Reserve's policy meeting April 29 and 30 in which the Fed is expected to cut interest rates by a modest quarter percentage point and may suggest the rate-cutting cycle it kicked off last fall has reached an end.
The Japan Times Weekly: May 3, 2008 (C) All rights reserved
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