Sunday, April 20, 2008

Oil hits $117 after Nigerian pipeline attack

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Oil hits $117 after Nigerian pipeline attack

NEW YORK (AP) -- Retail gas prices set new records Friday on their seemingly relentless march toward $3.50 a gallon, and diesel prices pushed further above $4 a gallon.

Oil futures, meanwhile, surged to a new record over $117 a barrel after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.

At the pump, the national average price of regular gas rose 2.7 cents overnight to a record $3.445 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel fuel added 2.2 cents to a record national average of $4.168 a gallon.

The spike in the cost of fuel is hurting consumers already feeling the effects of a slowing economy, a sluggish job market and falling home values. Soaring prices of diesel, which runs most of the world's trucks, trains, ships and heavy equipment, is a major factor pushing food prices higher.

Some analysts call for prices to peak near $3.80 a gallon; the Energy Department, in a recent forecast, said prices could average $4 a gallon nationally at times.

Meanwhile, oil continued pushing to new records, pulling gas prices higher despite the fact that demand for the expensive fuel has fallen this year. On the New York Mercantile Exchange on Friday, light, sweet crude for May delivery rose $1.83 a barrel to settle at $116.69 after hitting a new trading high of $117.

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