Oil zooms past $113/barrel

Crude oil rose to a record above $113 a barrel in New York on supply disruptions in Nigeria and Mexico and rising fuel demand in China.

Oil climbed to $113.66 a barrel on the New York Mercantile Exchange, the highest since futures began trading in 1983.

Mexico, the US's third-largest crude supplier, shut its fourth export terminal yesterday, while Eni halted output in Nigeria. China said on Tuesday diesel imports surged 49 per cent in March.

"The predominant market view is that the emerging economies will overcompensate for any possible demand slump in OECD countries," said Eugen Weinberg, an analyst at Commerzbank in Frankfurt.

Crude oil for May traded at $113.40 a barrel, up $1.64, at 1:15 pm in London. Prices have gained 78 per cent in a year and yesterday rose $1.62 to settle at $111.76, the highest close.

Record oil prices are crimping profits at airlines, boosting food costs and contributing to rising inflation across the globe.

Eni's Nigerian venture halted production at some oil wells following explosions on April 12 near the Beniboye area in Delta state, the company said yesterday.

The shutdown, blamed on "sabotage," has cost Eni about 5,000 barrels a day in output, the Rome-based company said in a statement posted on its website.

Petroleos Mexicanos, the third-largest supplier of crude to the US, shut its crude oil export terminal on the Pacific coast yesterday.

Terminal closure
The terminal at the port of Salina Cruz closed on Tuesday, Mexico's Merchant Marine reported in a weather bulletin posted on its website. The three Gulf of Mexico terminals at the ports of Pajaritos, Dos Bocas and Cayo Arcas remain shut. Brent crude for May settlement rose as much as $2.01, or 1.8 per cent, to $111.85 a barrel, an all-time intraday high, on London's ICE Futures Europe exchange. It traded at $111.69 at 1:11 pm local time. The contract yesterday closed at a record $109.84.

Oil has risen 39 per cent and the dollar has dropped 12 per cent against the euro since the Federal Reserve began lowering interest rates September 18. The euro traded at $1.5836 versus the dollar as of 1:13 pm in London from $1.5832 late in New York yesterday.

The Organisation of Petroleum Exporting Countries on Tuesday said a decline in global demand for oil during the second quarter could be more "pronounced," should the US economy continue its slide into recession.

In its monthly report, OPEC left its forecast for 2008 oil demand steady at 86.97 million barrels a day, a 1.2 million barrel- a-day gain over 2007.