Oil prices have surged to new record highs near $50 for US crude as Nigeria emerges as the latest focus for worries about supply security on world energy markets.
US light crude gained 86 cents to $49.74 a barrel today, the highest in 21 years of trade on the New York Mercantile Exchange contract. London Brent, the benchmark for European crude imports, rose 92 cents to a record $46.25 a barrel.
Growing concerns over militancy in Nigeria, OPEC's number five producer, are compounding worries about supply security in Russia, Saudi Arabia and Iraq.
"All these factors create apprehension in the market and reinforce the view that we're on a knife's edge in terms of supply and demand," said Mr Daniel Hynes, industry analyst at ANZ Bank in Melbourne.
"The uncertainties heighten the risk premium applied to this market."
Global supplies have risen strongly this year but are still straining to meet the fastest demand growth in 24 years. World crude output is close to its limit after many years when OPEC producers kept large volumes untapped.
The lack of a supply cushion has reinforced the view among some investors that oil near $50 is not overpriced, despite a 50 per cent jump crude prices since the start of the year.
In Nigeria, rebels seeking political reforms in the impoverished oil-producing Niger delta, forced the closure by Royal Dutch/Shell of 30,000 barrels a day as a security precaution.
The militants, threatening output from the country that pumps 2.5 million barrels daily, said at the weekend they would seek to extend the uprising across the West African producer's entire southern delta oil region.