LONDON (AFP) - World oil prices stormed above 54 dollars for the first time as strikes in Nigeria and Norway raised worries about possible supply shortages during the northern hemisphere winter.
The price of reference light sweet crude for delivery in November rose 64 cents to 54.28 dollars a barrel in electronic trading on the New York Mercantile Exchange, the highest in the contract`s 21-year history.
In London Brent North Sea crude oil for November delivery soared 84 cents to a record 51.50 dollars a barrel in early trading, smashing through 51 dollars for the first time in the contract`s 16-year history.
"Everybody is worried," said Lee Elliot, a trader with GNI-Man Financial.
"There are great concerns about Nigeria. Though it is not affecting oil at the moment, people think it might.
"Also there is a strike going on in an oil rig in Norway. It is only a loss of 55,000 barrels per day, but people have got their eyes on it as it looks like it could go for the rest of the week."
Traders were nervous ahead of US petroleum inventory data, to be released Wednesday, following recent supply problems in the Gulf of Mexico caused by Hurricane Ivan which continue to affect output.
With demand in China and the United States racing ahead, markets are jittery about any potential disruptions to supplies, particularly light sweet crude, of which Nigeria is a major producer.
Nigerian unions began a four-day general strike on Monday in protest at rising fuel prices, launching their latest challenge to President Olusegun Obasanjo and his programme of economic reforms.
Nigeria is Africa`s largest oil producer, with exports of around 2.5 million barrels per day (bpd).
In Norway, the world`s third biggest exporter of crude, strike action by some 200 off-shore workers that has lasted since the beginning of July was affecting supplies.
The strike is reported to have cut Norway`s production by 55,000 bpd, two percent of its normal production level of around three million bpd.
Meanwhile the Paris-based International Energy Agency lifted its forecast for global oil demand in 2004 but pared its estimate for next year.
In its monthly oil market report for October, the organisation raised its global oil demand forecast for this year to 82.4 million barrels per day from 82.16 million bpd previously due to stronger-than-expected demand from Asia.
Prices for light sweet crude oil, which is prized by refiners for its low sulphur content, are set to remain high, the IEA said.
"As a consequence of surging demand and the structural imbalance between supply and refining logistics, light sweet crude oil prices are, and will continue to be, supported by a tight product-driven market," the report said.