Oil Having Rest After Incredible Leaps

Oil stopped climbing up on Wednesday after getting to a record $123 a barrel in the previous day's session on supply concerns.

Prices were supported by concerns about supply disruptions in Nigeria, where production at a Royal Dutch Shell facility was cut after a weekend attack. The main militant group in Nigeria's oil-rich southern region said Tuesday it is willing to cease hostilities if the federal government allows conflict mediation by a former US president.

A string of pipeline bombings in recent weeks has cut oil production in Nigeria by tens of thousands of barrels per day, contributing to the sharp rise in oil prices. The country is Africa's largest producer and a major US supplier.

Light, sweet crude for June delivery rose 5 cents to $121.89 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract on Tuesday soared to a record $122.73 a barrel before retreating to settle at $121.84, up $1.87.

The rise in crude futures also gained momentum Tuesday as investors bought on a Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years.

Still, expectations that US crude supplies increased last week were helping to limit oil's rise ahead of the release of the US Energy Information Administration's report on fuel inventories later Wednesday.

Analysts surveyed by energy research firm Platts expected the report to show that crude oil inventories rose by 1.5 million barrels last week.

Gasoline stocks were projected to drop by 500 000 barrels, according to the Platts survey. Inventories of distillates, which include heating oil and diesel, were expected to have risen by 1.3 million barrels.