Oil prices soared above $59 a barrel to a record high today, extending last week's surge as a threat against Western consulates in OPEC-member Nigeria jolted traders already worried about tight supplies.
Oil climbed more than 9 per cent last week, or nearly $5, drawing buying interest from trend-following hedge funds as prices topped the previous early April high.
US light crude for July delivery hit a front-month record $59.23 per barrel, before paring gains to stand up 58 cents at $59.05 earlier.
Contracts for delivery in the last four months of the year, when oil demand seasonally picks up in the northern hemisphere, all traded above $60.
London Brent crude for August climbed 59 cents to $58.35 a barrel, having hit a fresh front-month peak of $58.58.
Market anxiety over oil exports from producer nations resurfaced on Friday after the United States, Britain and Germany closed their consulates in Nigeria's largest city Lagos due to a threat from foreign Islamic militants.
The US reopened its consulate today. A diplomatic source said that while the closure had averted the threat, further closures could not be ruled out. "The market continues to suspect there might be supply disruptions resulting from these issues in Nigeria," said Daniel Hynes, resource analyst at ANZ Institutional Banking.
"When you get that occurring during an extremely tight period of strong demand, then prices naturally are going to react very strongly."
igeria is the world's eighth largest oil exporter and supplier of about 10 percent of US crude imports.