Crude oil prices edged closer to $120 a barrel yesterday on concern that a labour dispute in Scotland and supply disruptions in Nigeria may severely reduce supplies of black gold.

US light, sweet crude for May delivery settled up $1.89 at $119.37 in New York after hitting an all-time peak of $119.74 earlier. In London, North Sea Brent crude gained $1.52 to settled at $115.95 a barrel, after rising to a record peak of $116.75.

Oil prices soared as unions planned to strike at a refinery in Grangemouth that receives shipments of benchmark Brent crude oil from the North Sea. The Grangemouth refinery produces about 196,000 barrels of motor fuel and other products a day.

Royal Dutch Shell said 169,000 barrels a day were suspended because of attacks last week in Africa's largest producer.

Oil has climbed to record peaks this month, driven by booming demand from emerging markets such as China that has coincided with long-term supply constraints.

A weak US greenback has also played a part in boosting the price of dollar-denominated commodities like oil and also attracted speculative inflows from hedge funds.

"Every time the market does make new highs, it suggests that the upward trend is still intact and that provides a catalyst for the funds to keep buying it," said Tony Machacek of Bache Commodities.

The Organisation of the Petroleum Exporting Countries has insisted the market has enough oil and refused to pump more crude despite calls for more oil from consumer nations.

However, the cartel's secretary-general said yesterday there are plans to boost oil production target capacity by five million barrels a day by 2012.

Abdalla Salem el-Badri, in an interview with Dow Jones Newswires on the sidelines of a Rome energy forum, said the members of Opec are planning to spend $160bn (£80bn) during the next four years to boost production capacity.