Crude oil hits a new peak at $117 a barrel

Mumbai: Crude oil prices climbed to a record $117 a barrel on Friday despite a dollar rally and concerns of an economic slowdown in China.

US light sweet crude settled up $1.83 at $116.96 a barrel, before hitting a record $117. London Brent crude rose $1.49 to $113.92.

The oil price rally has been aided by the sabotage of a major oil pipeline operated by Royal Dutch Shell by Nigerian rebels who vowed to step up attacks on oil installations.

Shell, which currently pumps 400,000 barrels per day from the Nigerian fields, confirmed a small amount of production had been shut in.

Oil prices have more than quadrupled since 2002 as supply struggles to keep up with booming demand, especially in China and other emerging economies.

A British union has also planned to launch a two-day strike from April 27 at Ineos Grangemouth refinery, forcing it to shut down. This has affected the North Sea Forties pipeline system, which terminates there, both sides said on Friday.

Strong demand for diesel fuel in emerging markets has been offsetting weakness in US oil demand, analysts said, adding, US crude oil futures are likely to average $105 a barrel this year and end the year at $115 a barrel.

A sharp fall in China's stock market on Friday spurred concerns over a possible economic slowdown in China, the world's second largest consumer of oil. China's stock market fell nearly 4 per cent to a 12-month closing low as the biggest stock.