April 28 (Bloomberg) -- Crude oil rose to a record $119.93 a barrel in New York on the shutdown of a North Sea pipeline and as a strike and militant attacks reduced output from Nigeria.

BP Plc closed the Forties Pipeline System, carrying 40 percent of the U.K.'s oil production, after a strike at the Grangemouth refinery in Scotland cut power supplies. A walkout by Exxon Mobil Corp. workers entered a fifth day in Nigeria, where production has dropped 50 percent since April 25.

``As long as there are disruptions of high-quality crude supplies, prices are going to move higher,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``If the Nigerian strike isn't settled, we could easily see oil rise to $125 by the end of the week.''

Crude oil for June delivery rose 23 cents to settle at $118.75 a barrel at 2:47 p.m. on the New York Mercantile Exchange.

Prices closed above the Bloomberg Trender support line today, as they have since April 7, indicating crude oil will continue to rise. The Trender is a technical study that signals a price's direction based on the speed and variance of past changes of direction.

Oil increased 79 percent in the past year as supply failed to keep up with surging demand in China, India and the Middle East. Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said on April 26 that the group won't consider raising output before its next meeting in September.

Investors moved to commodities as a hedge against the dollar as the currency fell to a record low against the euro, and as an alternative to equity and bond markets.

`Sweet' Oil

The North Sea and Nigeria produce low-sulfur, or sweet, oils prized by refiners. U.S. refineries usually bolster fuel output in May as they prepare for the peak-demand summer driving season.

Workers at Ineos Group Holdings Plc's Grangemouth refinery began a two-day walkout yesterday in a protest over pensions. The strike is scheduled to end tomorrow at 6 a.m. local time, Pauline Doyle, a union spokeswoman, said in an interview today. It will take Ineos three weeks to return the 200,000 barrel-a-day refinery to full capacity, the company said.

Brent crude for June settlement rose 40 cents, or 0.3 percent, to settle at $116.74 a barrel on London's ICE Futures Europe exchange, a record close. The contract touched an intraday record of $117.56 on April 25.

``It's not clear how long it will take Forties to return,'' said Tom Bentz, a broker at BNP Paribas in New York. Between Grangemouth and Nigeria ``you are talking about at least 1.4 million barrels a day, which is obviously significant.''

Exxon's entire Nigerian production of 860,000 barrels a day was halted at 6 p.m. April 25, according to Olusola George- Olumoroti, chairman of the branch of the Petroleum & Natural Gas Senior Staff Association of Nigeria, or Pengassan, that's taking action against Exxon. Union leaders planned to meet with the head of Nigeria's state-owned oil company today, he said.

`Operation Cyclone'

The Nigerian militant group, the Movement for the Emancipation of the Niger Delta, said it will continue its campaign to attack every oil and gas pipeline in the nation as part of its ``Operation Cyclone'' campaign.

The strike, combined with militant attacks between April 17 and April 25 on crude-oil pipelines operated by Royal Dutch Shell Plc, have shuttered about half of Nigeria's current production, H. Odein Ajumogobia, Nigeria's petroleum minister of state, said last week.

Limited Supplies

There is a ``huge risk'' that oil prices will continue to rise until demand collapses because additional supplies are limited and alternative fuels are decades away from replacing crude, Deutsche Bank AG's chief energy economist Adam Sieminski said in a report dated April 25.

``There is a huge risk that the oil price simply continues to escalate until it gets to some level ($200 a barrel?) when demand finally collapses because ordinary people can no longer afford to burn as much energy as they are burning now,'' Sieminski wrote.

Hedge-fund managers and other large speculators increased bets on rising oil prices in the week ended April 22, according to data from U.S. Commodity Futures Trading Commission. Speculative long positions, or bets prices will rise, outnumbered short positions by 70,562 contracts, a 6 percent gain, the CFTC said on April 25 in its Commitments of Traders report.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: April 28, 2008 15:37 EDT