Oil prices climbed half a dollar to above $68 a barrel today after shrugging off a likely rollover in Opec production to focus on talks on Iran's nuclear programme and renewed threats to Nigeria's output.
US light crude rose 49 cents to $68.25 a barrel after soaring $1.50 a barrel on Friday. Prices are up more than $7 this year and touched $69.20 a barrel a week ago, the highest since Hurricane Katrina hit the US Gulf Coast last summer.
London Brent crude climbed 46 cents to $66.70.
Opec's meeting in Vienna tomorrow is being overshadowed this week by talks on Iran, with the United States and European Union powers gathering later today in an effort to convince Russia and China to back tough diplomatic action they hope will prevent Tehran from continuing with its nuclear activity.
On Thursday, the UN's International Atomic Energy Agency will hold an emergency session at which the board could decide to refer Iran to the UN Security Council, a move traders fear could prompt Tehran to consider using its oil as a political weapon.
"The market has the same buy factors - Iran and Nigeria - and now increasing tension ahead of the IAEA meeting could drive the market higher," said Naohiro Niimura, vice president of the derivatives unit at Mizuho Corporate Bank in Tokyo.
Concerns over supplies from the world's fourth-largest exporter, as well as lost output from Nigeria, have added fuel to a market ignited by a new flood of fund money into the commodities complex, which has performed strongly for two years.