New YorkÕs main oil futures contract, light sweet crude for delivery in June, rose nine cents to $118.16 per barrel.

International concern mounted as world oil prices edged closer to $120 a barrel on Wednesday and the world’s top producer called for calm. Analysts said a weakening US dollar, supply worries in Nigeria and the OPEC’s reluctance to increase output have all contributed to the price surge, AFP wrote.
In afternoon trade, New York’s main oil futures contract, light sweet crude for delivery in June, rose nine cents to $118.16 per barrel. The May contract expired on Tuesday after closing at a record $119.37 per barrel at the New York Mercantile Exchange, where it earlier hit an all-time intraday peak of $119.90.
Global supply jitters have seen oil contracts traded in New York spike by more than $57 in the past year. Price records in New York and London have been broken almost daily over the past week. Brent North Sea crude for June delivery rose 15 cents to $116.10 a barrel, after settling at an all-time high of $115.95 on Tuesday in London. The contract earlier touched a record $116.75 in intraday activity.
“Market sentiment is bullish in the immediate term,“ said Victor Shum, senior principal of Purvin and Gertz energy consultancy in Singapore. “The weak US dollar, real supply disruption in Nigeria... are pushing prices higher“. But Shum said there is increasing concern that the rally in oil pricing “has been too much and too fast“.
Ministers from 74 countries attending the International Energy Forum in Rome on Tuesday said oil prices should be at levels acceptable to producers and consumers, “to ensure global economic growth, particularly in developing countries.“
US President George W. Bush expressed concern at the impact of high price levels on consumers.
Saudi Arabia’s petroleum minister, Ali Al-Naimi, on Tuesday called for calm in the face of runaway oil prices. He said the world is not running out of oil.
The root of the problem was primarily due to “limited capacity along the entire supply chain.... at its heart, this is not an energy resource issue; it is primarily an investment issue,“ he said at the Rome forum.
Saudi Arabia is the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC), which on Tuesday said that it plans to increase its production capacity by five million barrels per day (bpd) by 2012.
The organization’s secretary general Abdalla Salem El-Badri said OPEC aimed to boost production capacity by nine million bpd by 2020. Current OPEC output stands at about 32 million bpd.
Shum said OPEC’s move would have little impact in the near term. “Even though OPEC has promised to increase production capacity, the long-term supply increase does not resolve the main factors that are underpinning prices now,“ he said.
A weakening US dollar has spurred oil demand because dollar-priced oil becomes cheaper for buyers holding stronger foreign currencies.
The euro surged to a record $1.6002 Tuesday on renewed jitters about the US economy. “The weak dollar is a key thing that people are looking at,“ said Jason Feer, vice-president and general manager of energy market analysts Argus Media Ltd in Singapore.
Global supply worries were stoked after Anglo-Dutch oil group Royal Dutch Shell reported an output loss of 169,000 bpd from sabotage of its key pipelines in southern Nigeria. Shell said on Monday that it might not be able to honor oil contracts for April and May after the attacks.

A “silent tsunami“ of hunger is sweeping the world’s most desperate nations, said Josette Sheeran, the WFP’s executive director, speaking Tuesday at a London summit on the crisis, AP reported.
The price of rice has more than doubled in the last five weeks, she said. The World Bank estimates food prices have risen by 83 percent in three years.
Hosting talks with Sheeran, lawmakers and experts, British Prime Gordon Brown said the spiraling prices threaten to plunge millions back into poverty and reverse progress on alleviating misery in the developing world.
Malaysia’s embattled prime minister is already under pressure over the price increases and has launched a major rice-growing project. Indonesia’s government needed to revise its annual budget to respond.
Venezuelan President Hugo Chavez said on Tuesday that soaring food prices are a “massacre“ of the world’s poor and are creating a global nutritional crisis, calling it a sign that capitalism is in decline.

Compared to Washington, the European Union has been serene about piracy in China of its trademarks, copyright and patents. Violations of intellectual property rights, trademarks and patents held by EU companies and researchers will be high on the agenda when European Commission President Manuel Barroso leads a large delegation into two days of economic and trade talks in Beijing starting Thursday, AP said.
The EU estimates pirated goods cost EU businesses $33.3 billion in lost trade annually --about a third of current EU exports to China. But unlike the United States, it has to date not pursued any Chinese piracy cases in the World Trade Organization.
Still, the EU has put China in the category of worst violators of intellectual property. It is the only country in that category because its anti-piracy efforts are so weak that 80 percent of counterfeit goods imported into the 27-nation bloc are Chinese-made.
Other issues include EU complaints that China’s currency is undervalued and has pushed the EU’s trade deficit to $270 billion in 2007. The EU also feels investing in China too often means having to launch joint ventures and transfer technology developed by Europeans.

The Bank of Canada slashed interest rates by half a percentage point Tuesday amid worrying signs that the economic slowdown could be steeper and longer than previously thought. It was second time in as many months that new bank governor Mark Carney has moved aggressively on interest rates, bringing down the key overnight rate to three percent, one-and-a-half points below where it was at the start of December, Bloomberg wrote.
But with the cost of borrowing higher and conditions tighter, Canada’s major commercial banks signaled reluctance to follow suit with a corresponding cut in their prime rates, which stand at 5.25 percent and had not moved by mid-afternoon.
Not since the mid-1990s have the chartered banks declined to follow the central bank’s signal to make borrowing easier for businesses and consumers.

A strike by customs officers demanding higher wages has practically paralyzed Brazil’s ports and is starving some companies of needed imports, according to the industry association for the state of Sao Paulo, AFP reported.
The stoppage, which began more than a month ago, has notably blocked the gigantic port of Santos, costing the country an estimated $4.9 billion, the association told Tuesday’s edition of the Folha de Sao Paulo newspaper. That facility, the biggest of its type in Latin America, is the main entry for goods into Brazil, notably the industries that thrive in the relatively rich southeastern state of Sao Paulo.
On Monday, there were 120,000 containers piled up in the port, more than double the usual number. The ports of Rio de Janeiro and Paranagua were also affected. “The biggest damage done by the strike is the delay for export contracts and the lack of supplies for industry, which is going to hurt Brazil’s image abroad,“ the head of the Sao Paulo state industry association, Ronaldo Forte, told Folha de Sao Paulo.
The booming automobile sector in particular was feeling the pinch, with stocks of imported spare parts dwindling.