Oil futures surged to a new record over $120 a barrel today as supply threats emerged overseas and the dollar weakened against the euro.
NEW YORK — Oil futures surged to a new record over $120 a barrel Monday as supply threats emerged overseas and the dollar weakened against the euro. Retail gas prices, meanwhile, fell more than a cent over the weekend, offering further evidence that prices may have peaked for the year.
Light, sweet crude for June delivery rose to a new trading record of $120.21 a barrel on the New York Mercantile Exchange Monday before retreating slightly to trade up $3.52 at $119.84.
“The (oil) market is bolstered by news out of Iraq, where Turkish forces have once again been involved in cross-border raids against … insurgents, and Nigeria, where rebels attacked three oil wells and pipelines feeding (an) export terminal over the weekend,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn., in a research note.
Kurdish rebels on Monday warned they could launch suicide attacks against American interests to punish the U.S. for sharing intelligence with Turkey after Turkey bombed rebel bases in Iraq on Friday. Oil traders worry that any conflict in the oil-rich Middle East will cut oil shipments out of Iraq.
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In Nigeria, a Royal Dutch Shell PLC spokesman said attackers hit an oil facility belonging to Shell’s joint venture in southern Nigeria and that some oil production has been shut down. Nigeria is a major U.S. crude supplier.
Also pushing oil prices higher were concerns about Iran after Supreme Leader Ayatollah Ali Khamenei said Sunday his country will not bend to international pressure and give up its nuclear program. Iran is the second largest producer in the Organization of Petroleum Exporting Countries.
Amid the supply worries, the dollar weakened, giving investors even more reason to buy crude. Many investors buy commodities such as oil as a hedge against inflation when the greenback falls. Also, a weaker dollar makes oil cheaper for overseas investors. Analysts blame the dollar’s protracted decline for oil’s rise to records near $120 this spring.
At the pump, meanwhile, the average national price of a gallon of regular gas slipped to $3.611 a gallon on Monday, down 1.1 cents from Friday, according to AAA and the Oil Price Information Service. Prices peaked at a record $3.623 a gallon on Thursday.
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Associated Press Writers Yahya Barzanji in Iraq, George Jahn in Vienna and Gillian Wong in Singapore contributed to this report.