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Tuesday, May 6, 2008

Supply panic pushes oil over $120

Mon, 05 May 2008 21:02:53

Oil prices have skyrocketed to over $120 per barrel as Iran promises not to consider any incentives which violate its nuclear rights.

An increase in supply panic caused by Iran's nuclear dispute with the West and a rebel attack in Nigeria pushed US crude oil futures to $120.20 a barrel on Monday, before slipping back to $120.

The price for New York's main oil futures contract gained an average of $3.68 in comparison to its respective closing price on Friday.

Iranian Foreign Ministry spokesman Mohammad-Ali Hosseini had said earlier on Monday that the Islamic Republic would not review incentives should they violate the rights of the nation in acquiring nuclear energy enrichment capabilities in line with the Non-Proliferation Treaty.

The foreign ministers of the five permanent United Nations Security Council member states plus Germany had met in London on Friday to draw up a new package of incentives to convince Iran to suspend its uranium enrichment program.

Another contributing factor to the surging oil prices was a rebel attack on Shell-operated pipelines in Africa's biggest oil producer Nigeria, forcing the company to halt 170,000 barrels per day of its crude exports.

"Supply issues in Nigeria and tensions between Iran and the West are at play here," explained prominent Singapore-based energy analyst Victor Shum.

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