LONDON, April 28 (KUNA) -- Oil prices have hit a fresh high just below 120 US dollars-a-barrel after a strike at a UK refinery disrupted production from the North Sea, it was announced here Monday.
The oil giant British Petroleum (BP) shut down a key North Sea pipeline after staff walked out of the Grangemouth refinery, in Scotland, in a two-day strike over pensions.
Providing a third of UK oil output, the closure of the "Forties" pipeline has raised fears about supply shortages, analysts said.US light; sweet crude hit a high of 119.93 dollars-a-barrel before edging down to 119.40 dollars.
In doing so, it passed the previous record mark of 119.90 dollars-a-barrel achieved last Friday.
In London, Britain's North Sea benchmark Brent crude rose 72 cents to 117.06 dollars-a-barrel today.
The BP-run pipeline from the Forties oil fields in the North Sea relies on steam and electricity from the "Ineos" refinery at Grangemouth, Scotland.
Grangemouth's closure has caused up to 70 platforms in the North Sea to either shut down or reduce production of oil, resulting in the loss of 700,000 barrels of oil a day.
Although BP has said it can re-open the pipeline within 24 hours of the strike's end tomorrow (Tuesday), it will take weeks for the refinery to return to full capacity, the analysts added.
It will affect supplies from the North Sea and that has a potentially significant impact, they pointed out.
The trouble at Grangemouth is the latest spur to an already volatile oil market, which has seen prices rise nearly 25 percent this year.
Regular attacks on oil facilities in Nigeria, the weak US dollar and general concerns about the ability of supply to meet global demand have underpinned the market this year.
Meanwhile, OPEC has shown itself disinclined to raise quotas to curb rising prices.
And the dollar's decline has made dollar-denominated assets such as oil and other commodities relatively cheap for some investors.
"We have got a confluence of a number of events that have really disrupted crude oil supply and that's what's driving oil to a new record", the analysts concluded.
Copyright Kuwait News Agency 2008.
