LONDON, July 28: Oil prices rose on Monday as Anglo-Dutch energy giant Royal Dutch Shell cut output in Nigeria after militants sabotaged at least one of its pipelines supplying crude.

Prices also climbed as the market tracked developments over a disputed nuclear programme being run by Iran, a major exporter of oil. Brent North Sea crude for September delivery climbed 42 cents to $124.94 a barrel, though off earlier highs of above $126 as profit-taking set in.

New York’s main contract, light sweet crude for September, advanced by 36 cents to $123.62 a barrel.

“Crude futures were higher amid geopolitical concerns over Iran and Nigeria,” said Sucden analyst Nimit Khamar.

“The events in Iran and Nigeria just go to remind the market participants that geopolitical risks still remain and have a potential to disrupt oil supply,” added Khamar at the Sucden brokerage in London.

However the price of oil could drop to between $70 and $80 a barrel if the dollar strengthens and concerns over Iran are reduced, Opec chief Chakib Khelil said on Saturday.

A strong US currency weighs on demand for dollar-priced goods because they become more expensive for buyers holding weaker currencies.

Oil prices struck record highs above $147 a barrel on July 11 as the US unit weakened and owing to tensions over Iran.

They have since fallen more than $20 on concerns that the global economic slowdown will weigh on energy demand, particularly in the United States — the world’s biggest consumer of oil.—AFP