Oil Prices Jump Past $120 On Supply Disruption Fears

New York, NY (AHN) - Oil futures surged to over $120 a barrel, setting a new record in New York over concern that the supplies could be disrupted due to political unrest in Nigeria and northern Iraq.

Light, sweet crude for June delivery increased to $120.21 a barrel on the New York Mercantile Exchange on Monday before it fell back to trade up $3.52 at $119.84. The reports said that militants in Nigeria have attacked oil wells and pipelines causing a disruption of oil production in the region.

"Nigeria is the lingering hotspot the markets will be focusing on," MF Global analyst Ed Meir, told the BBC, adding that there were "reports of fresh violence, as another pipeline explosion has shut in more oil production."

Nigeria, which is considered as Africa's top producer, may suffer from the current situation as crude is one of its main exports. The Nigerian Movement for the Emancipation of the Niger Delta (MEND) claimed responsibility for the weekend assault.

"[MEND] overran a heavily fortified Shell flow station in Bayelsa state and destroyed the facility," the group said in a statement, according to Bloomberg. The attack was carried out on May 3 at around 2:00 am, destroying three well-heads.

The Nigerian rebel group has attacked Shell-operated pipelines in the region, leading the firm to stop 170,000 barrels a day of exports of Bonny Light crude.

The price has gained 94 percent in the past year.

Meanwhile, Turkish troops have renewed cross-border raids against Kurdish rebels PKK in Northern Iraq.

Kurdish rebels have also warned on Monday that they would launch attacks against causing disruption of oil supply from Iraq after the group's bases were bombed by Turkish forces last week and the rebels suspect that the U.S. had shared intelligence about their bases with Ankara.