World oil prices continued higher in Asian trade yesterday while supply worries outweighed concerns about the health of the US economy, analysts said.
In afternoon trade, New York's main oil futures contract, light sweet crude for delivery next month, rose US$0.16 to US$91.93 per barrel.
The contract closed US$3.66 higher at US$91.77 a barrel during floor trading at the New York Mercantile Exchange on Friday.
Brent North Sea crude for March delivery increased by US$0.20 to US$92.14 a barrel, after settling US$3.43 higher at US$91.94 on Friday in London.
"The increase in oil prices is a continuation of the trend seen on Friday in New York," said David Moore, a commodities strategist at the Commonwealth Bank of Australia in Sydney.
"Prices are being driven up due to the news of crude oil disruptions. The market is less concerned about the US economy right now," he said.
Fears that the US economy could be entering a recession, with a likely decline in energy demand, have spooked oil markets.
Anglo-Dutch oil group Shell said on Thursday it would not be able to honor all its export contracts from its southern Nigerian Bonny export terminal for the rest of this month and next because of sabotage. The company did not give figures on the expected loss in production but industry sources said it runs into thousands of barrels of crude.
Shell is Nigeria's largest oil operator, accounting for around half of the country's daily output of 2.6 million barrels at peak production, but unrest in the Niger Delta has slashed production by a quarter since January 2006.
Shell has declared a force majeure, which allows companies to suspend contractual obligations such as deliveries of oil and gas following unforeseen events, without incurring penalties.
Apart from concerns for crude oil supplies in Nigeria, Moore said comments from Venezuelan President Hugo Chavez "may also add a bit to the increase in prices."
Chavez on Sunday warned US oil giant ExxonMobil, with which Venezuela is engaged in a legal fight linked to nationalization of key oil fields, would never again "rob" his country.
Top world finance ministers from the G7 called on Saturday for OPEC and other oil-producing countries to raise production.
The call came in a statement at the conclusion of a G7 meeting in Tokyo, where the ministers warned that the global economy faces growing threats from a US housing slump and credit crunch.
OPEC Secretary-General Abdullah al-Badri told the Middle East Economic Digest separately that the cartel could switch the pricing of oil from dollars into euros within a decade.
He told the London-based weekly that could adopt the euro to combat the decline of the dollar.
"Maybe we can price the oil in the euro. It can be done, but it will take time," he said.
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