29 September 2004	Wednesday	13 Shaban 1425

LONDON, Sept 28: World oil prices surged into new record territory above $50 a barrel on Tuesday as traders took fright at a multitude of supply threats, including unrest in Nigeria and recent hurricanes.

But feverish markets cooled slightly after Saudi Arabia undertook to increase oil production capacity by 1.5 million barrels per day (bpd) to 11 million within weeks.

New York's light sweet crude for November delivery hit $50.47 per barrel in electronic deals, the highest level in the contract's 21-year history. Prices later stood at $49.90 per barrel in morning trading, showing a rise of 26 cents.

Traders worried about unrest in major oil producers Nigeria - an important supplier to the US market - and Saudi Arabia, recent hurricanes in the Gulf of Mexico, violence in Iraq and the financial woes of Russian energy giant Yukos.

An armed group accused of trafficking in illegally extracted crude in Nigeria threatened to attack international oil facilities and personnel in the troubled Niger Delta region, a regional government spokesman said.

"It's all about supply disruptions, not just in the Middle East but also in Nigeria, in the Gulf of Mexico or in Russia," said Commerz bank energy analyst David Thomas. "On top of that, we have ever-tightening inventories with the further forecast of crude stocks being down again in the US because of the hurricane activity," he added.

In London the price of reference Brent North Sea crude oil for delivery in November scaled a new summit of $46.80 in electronic trading, the highest level since trading on the London market began in 1980.

Prices stood at $46.35 in late afternoon trading, a rise of 42 cents. Crude oil futures had smashed the $50-barrier for the first time in after-hours New York deals on Monday.

Adjusted for inflation, world oil prices remain far below the levels reached in the wake of the 1979 Iranian revolution when prices surged to upwards of $80 dollars a barrel in today's money.

Prices rose after the Niger Delta People's Volunteer Force, led by Mujahid Dokubo-Asari, said in a statement late Monday it would launch an "all-time war against Nigeria" from October 1.

It advised oil majors to leave the delta, which pumps all of Nigeria's 2.3 million barrels per day production. Oil giant Shell has already evacuated 200 non-essential workers from the Niger Delta oil region and on Tuesday closed a flow station, Santa Barbara, which produces about 28,000 bpd of oil, because of restrictions on staff movements, a company spokesman here said.

Traders took some comfort from a pledge by Saudi Arabian Oil Minister Ali al-Nuaimi that the kingdom would use two fields which recently came on stream to hike its production capacity to 11 million barrels per day.

The Arabic version of Nuaimi's statement said the increase would take place "within the next few weeks." Mr Nuaimi said this would give Saudi Arabia, currently pumping 9.5 million bpd, a surplus output capacity of 1.5 million bpd. -AFP