LONDON (AFP) — Record-breaking oil prices paused on Wednesday after spiking near 120 dollars per barrel, as international concern mounted and the world's top producer appealed for calm over soaring energy costs.
New York's main oil futures contract, light sweet crude for delivery in June, added four cents to 118.11 dollars a barrel. The May contract had struck a record high 119.90 before expiring Tuesday.
London's Brent North Sea crude for June delivery firmed seven cents to 116.02 dollars on Wednesday, after hitting a lifetime peak of 116.75 on Tuesday.
Prices soared to historic heights on Tuesday as an attack on crude pipelines in Nigeria further tightened global energy supplies, which are under intense pressure with crude cartel OPEC refusing to raise short-term output.
Additional support came from the weak US currency, which makes dollar-priced oil cheaper for foreign buyers and stimulates demand. The euro surged past 1.60 dollars for the first time on Tuesday.
"Market sentiment is bullish in the immediate term," said Victor Shum, senior principal of Purvin and Gertz energy consultancy in Singapore.
"The weak US dollar, real supply disruption in Nigeria... are pushing prices higher."
Later on Wednesday, traders will focus on the latest weekly report on American energy stockpiles. The release is a focal point because the United States is the biggest energy consumer in the world, followed by number two China.
News of falling US energy inventories could send prices beyond the psychological barrier of 120 dollars, traders said.
However, Shum added that there was increasing concern that the current price rally "has been too much and too fast."
In Rome on Tuesday, ministers from 74 countries at the International Energy Forum said prices should be at acceptable levels for producers and consumers to ensure global economic growth, particularly in developing countries.
US President George W. Bush also expressed concern at the impact of high price levels on consumers.
Saudi Arabia's petroleum minister, Ali al-Naimi, called Tuesday for calm in the face of runaway oil prices, and added that the world was not running out of crude.
The root of the problem was primarily due to "limited capacity along the entire supply chain.... at its heart, this is not an energy resource issue; it is primarily an investment issue," he said at the Rome forum.
Saudi Arabia is the biggest producer in the Organisation of the Petroleum Exporting Countries (OPEC), which on Tuesday said that it plans to increase its production capacity by five million barrels per day (bpd) by 2012.
The cartel's secretary general Abdalla Salem El-Badri said OPEC aimed to boost production capacity by nine million bpd by 2020. Current OPEC output stands at about 32 million bpd.
Global supply worries were stoked after Anglo-Dutch oil group Royal Dutch Shell reported an output loss of 169,000 bpd from sabotage of its key pipelines in southern Nigeria.
Shell said on Monday that it might not be able to honour oil contracts for April and May after the attacks.
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