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Oil price hits $US50 a barrel

Crude oil futures hit $US50 in electronic after-hours trade in New York, setting a new record as supply worries intensified.

In regular trading the November benchmark contract for light sweet crude on the New York Mercantile Exchange rose 76 US cents to $US49.64 a barrel, the highest closing price in the 21 year history of oil futures trading on the exchange.

Traders cited unrest in Nigeria and Saudi Arabia, which spooked traders already nervous about a supply squeeze.

In London the price of reference Brent North Sea crude oil for delivery in November climbed 50 cents to close at $US45.93 after hitting a record peak of $US46.28, the highest level since the London market began trading oil in 1980.

Global supplies have risen strongly this year but are still straining to meet the fastest demand growth in 24 years.

The lack of a supply cushion has reinforced the view among some investors that oil at $50 is not overpriced, despite a 50 per cent jump in crude prices since the start of the year.

In Nigeria, rebels seeking political reforms in the impoverished oil-producing Niger Delta forced the closure by Royal Dutch/Shell of 30,000 barrels a day as a security precaution.

The militants, threatening output from the country that pumps 2.5 million barrels daily, said at the weekend they would seek to extend the uprising across the West African producer's entire southern delta oil region.

Separately, Nigeria already has been forced to cut back output from surge capacity to prevent long-term damage to its aging facilities, the first sign that efforts by OPEC countries to quell prices by squeezing out extra output may not be sustainable.

Extra crude from OPEC, now pumping at a 25-year high, has failed to make any impact.

Uncertainty over supplies from YUKOS, Russia's top exporter, also is supporting prices. YUKOS last week trimmed deliveries to China.

In Saudi Arabia, clashes between security forces and suspected Al Qaeda followers served as a reminder of the threat to stability in the world's biggest producer.

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