Oil rallies to record near $120

By Matthew Robinson

NEW YORK (Reuters) - Oil surged to records near $120 a barrel on Tuesday on the weaker dollar, export disruptions from Nigerian rebel attacks and concerns a Scottish refinery strike could hit North Sea production.

Further support came from data showing demand in China, the world's No. 2 consumer, leaped 8 percent in March from a year ago, the fastest rate in 19 months as refiners boosted imports ahead of the Olympics.

U.S. crude settled up $1.89 at $119.37 a barrel after hitting an all-time peak of $119.90 earlier. London Brent crude gained $1.52 to settle at $115.95 a barrel, after rising to a record peak of $116.75.

Oil's fresh highs extended a rally that has seen prices climb more than five-fold since 2002, as booming demand from emerging markets such as China has coincided with long-term supply constraints.

The slumping U.S. greenback, which tumbled to fresh lows against the euro on Tuesday, has also helped boost dollar-denominated commodities like oil and attracted speculative inflows from hedge funds.

"The trend is up and the market didn't break down when it moved lower in the morning, and you have the weak dollar and the supply disruptions are in the mix," said Eric Wittenauer, analyst at Wachovia Securities.

Pipeline attacks in OPEC member Nigeria last week shut 169,000 barrels per day (bpd) of Bonny Light production, forcing Royal Dutch Shell Plc to declare force majeure on crude oil exports.

Nigerian rebels also attacked two Shell oil pipelines in the Niger Delta on Monday. ID:n21129451