Oil Bounces on Supply Disruptions

Oil prices jumped on Monday because of a U.S. pipeline shutdown and some production losses in Nigeria following a fire at a flow station.
TradingEconomics.com, Bloomberg 4/14/2008 8:08:52 AM

U.S. crude oil futures rose 71 cents to $110.84 a barrel by 1250 GMT, after dropping to as low as $109.56.

Prices hit a record high of $112.21 a barrel last Wednesday after a big fall in U.S. oil inventories.

London Brent crude rose 48 cents to $109.23.

The Capline crude oil pipeline, which brings crude from the Gulf of Mexico to the U.S. Midwest, remained shut on Sunday afternoon as work continued to repair a leak, operator Shell Oil Co. U.S. unit of Royal Dutch Shell said.

It could not estimate when the 667-mile (1,073 kilometre) line would return to service.

Eni's Beniboye oil flow station in Nigeria has been losing 5,000 barrels of oil per day due to a fire that broke out during the night between April 12 and 13 after sabotage, the Italian energy firm said on Monday.

The dollar weakened on Monday, reversing its initial gains earlier in the day, pushing up oil prices, some analysts said.

The recent weakness of the U.S. currency has prompted investors to shift money from dollar assets to commodities markets, partly contributing oil's rally to new peaks.

During Asian and London trading, oil was mostly pressured down as weaker stock markets underlined economic gloom and the expectation of falling energy demand.

On Saturday, OPEC's head of petroleum market analysis told the International Monetary Fund's steering committee that global demand appeared to be softening, and that high oil prices in recent months were due more to financial market developments than fundamental growth in demand.