April 28 (Bloomberg) -- Crude oil rose to a record near $120 a barrel after BP Plc shut a North Sea pipeline and as an oil workers' strike and rebel attacks cut output from Nigeria.

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

``The drivers for oil to go to $130 are still intact,'' said Andy Sommer, an analyst with HSH Nordbank in Hamburg. ``We have the refinery strike in Scotland and the market is more nervous now that attacks will continue in Nigeria.''

Crude oil for June delivery rose as much as $1.41, or 1.2 percent, to $119.93 a barrel in electronic trading on the New York Mercantile Exchange, the highest since the futures began trading in 1983. It was at $119.06 at 1:31 p.m. in London.

Oil has risen 82 percent in the last year as demand has increased in China, India and the Middle East against a background of constrained supply. Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said on April 26 that the group won't consider raising production before its next meeting in September.

Investors have moved to commodities as a hedge against the dollar as it fell to a record low against the euro and as an alternative to flagging equities markets. The benchmark U.S. S&P 500 Index has dropped 9.8 percent since the start of the year.

`Substantial Production'

Brent crude for June settlement rose as much as $1.16, or 1 percent, to $117.50 a barrel on London's ICE Futures Europe exchange and was trading at $116.75 a barrel at 1:31 p.m. in London. It reached a record $117.56 on April 25.

``Nigeria is the real ongoing risk that's there in the market,'' said Simon Wardell, energy research manager with Global Insight Inc. in London. ``The key driver we've seen is the U.S. dollar, and as that continues to weaken the price will have this inexorable push behind it.''

Refinery production at Grangemouth will resume on April 29 at 7 a.m. local time. Units crucial to restart flows on the Forties pipeline will have priority, Richard Longden, spokesman for operator Ineos Group Holdings Plc, said yesterday.

North Sea

Oil grades from the North Sea and Nigeria, Africa's biggest producer, are low in sulfur and favored by refiners. Nigeria is losing about 50 percent of its output after staff at Exxon Mobil Corp.'s operations went on strike April 24 and militants attacked a Royal Dutch Shell Plc pipeline later the same day.

``We have pretty solid fundamentals, short-term disruptions and also we have investor flows, so everything is pushing oil up,'' said Mike Wittner, head of oil market research at Societe Generale SA in London. ``A lot depends not only on the fundamentals, but the strength or weakness of the U.S. dollar.''

Nigeria pumped 1.96 million barrels a day in March, according to Bloomberg estimates. Recent attacks on Shell-run pipelines, including the latest one, are cutting oil flows by about 140,000 barrels a day, the country's Oil Minister H. Odein Ajumogobia said April 25. The Exxon Mobil strike is halting about 860,000 barrels a day, according to union estimates.

Hedge fund managers and other large speculators increased bets on rising oil prices for a third time 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 Washington-based commission said in its Commitments of Traders report. This is the highest since the week ended March 21.

To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

Last Updated: April 28, 2008 08:33 EDT