This might just be the beginning of oil tanker attacks......
Oil prices spike to record above $117
Monday April 21, 9:53 am ET
By Pablo Gorondi, Associated Press Writer
Oil prices climb to record above $117 a barrel after Mideast attack on Japanese oil tanker
Oil prices spiked to a record above $117 a barrel on Monday after a Japanese oil tanker was attacked off the east coast of Yemen.
The 150,000-ton tanker Takayama was attacked about 270 miles off the Yemen coast in the Gulf of Aden while it was heading for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said in a statement posted on its Web site.
None of the ship's 23 crew members was injured, but several hundreds of gallons of fuel leaked before a 1-inch hole in the tanker's stern was repaired, the company said.
Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat.
News of the attack pushed crude oil futures higher into record territory.
Light, sweet crude for May delivery on the New York Mercantile Exchange rose to a record $117.40 a barrel but fell back to $116.80 in electronic trading by the afternoon in Europe, up 11 cents from Friday's closing price. Oil prices had touched $117 on Friday before slipping.
"There's clearly some geopolitical tension in the market," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia. "This will die down, but the market is pretty jittery at the moment.
Adding to the worries were claims Monday from the main militant group in Nigeria's restive south that it had launched two more attacks on oil pipelines in the region. There was no immediate confirmation.
On Friday, oil prices rose to touch $117 for the first time after an attack on a Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta.
Shell confirmed a pipeline leak that it said appeared to have been caused by explosives. It said it had isolated the line for repairs and that a small quantity of production had been shut.
Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the U.S.
Pervan said incidents such as the pipeline and tanker attacks were "one-off" issues that didn't really change the market. "They're not fundamental, they're not going to be sustainable," he said.
Comments over the weekend by an OPEC official that the group was not likely to increase production also supported prices Monday.
Abdalla Salem el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply -- something he doubted.
"Oil prices, there is a common understanding that has nothing to do with supply and demand," el-Badri said on the sidelines of an energy conference in Rome.
Also over the weekend, Iran's hard-line President Mahmoud Ahmadinejad was quoted Saturday as saying crude oil prices at $115 a barrel are too low, and that oil must "discover its real value."
The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday.
In other Nymex trading, heating oil futures rose 2.87 cents to $3.210 a gallon while gasoline prices rose 0.07 cents to $2.99 a gallon. Natural gas futures rose 9.7 cents to $10.684 per 1,000 cubic feet.
In London, Brent crude futures for June were up 13 cents to $114.50 a barrel on the ICE Futures exchange.
AP Business Writer Thomas Hogue in Bangkok, Thailand, contributed to this report.
(This version CORRECTS OPEC secretary-general's name to Abdalla Salem el-Badri sted Abdullah el al-Badri)