Oil prices broke above $46 on Monday after Russian oil giant Yukos said it would cut some oil shipments to China, the first toll on exports from the company's financial turmoil. Continued disruptions to US supplies in the wake of Hurricane Ivan, which thrashed through the energy-rich Gulf of Mexico last week and forced forcing oil platform shutdowns and evacuations, were also supporting prices.
US light crude settled up 76 cents at $46.35 a barrel, barely $3 below record peaks struck in August. London's Brent crude was up 46 cents at $42.91 a barrel.
Russia's biggest oil exporter, Yukos, said on Monday it will cut its supplies to China by 1 million tonnes (7.33 million barrels) in the remaining months of 2004 as it lacks funds to pay export fees.
Yukos has repeatedly said it might be forced to cut production and exports after bailiffs froze its bank accounts as part of efforts to get more than $7 billion in back taxes from the company.
Analysts said the China curbs aimed to embarrass the government less than a week before China's Prime Minister Wen Jiabao is due in Moscow to prepare a visit by President Vladimir Putin to Beijing planned for next month.
Countering fears of widespread disruption, Russia's state railways said Yukos has prepaid rail shipments until the end of September and pipeline monopoly Transneft said it believed Yukos would pay export fees for October.
A Yukos spokesman denied a report that Yukos would also suspend supplies to its Mazeikiu refinery in Lithuania.
Global supplies are already straining to meet the fastest growth in oil demand in 24 years, magnifying the impact of any disruption to oil flows.
Oil companies worked at the weekend to restore crude and gas production in the Gulf of Mexico, and refineries on the US Gulf Coast brought operations back slowly after Hurricane Ivan passed through.
Shell Oil said Monday it saw no significant impact from Hurricane Ivan on its oil and gas production facilities in the Gulf of Mexico, and expects full, or near full, recovery in output this week.
The US Minerals Management Service said on Monday Ivan has so far cut 7.8 million barrels of oil production and 33.3 billion cubic feet of gas production from the Gulf.
Traders fear that Tropical Storm Jeanne may delay imports into the United States, where crude stockpiles are already at a six-month low.
The US National Hurricane Centre in Miami expected Jeanne to turn to the north-east, away from the Bahamas, by late Monday, on a path that would spare Florida, which has been devastated by three hurricanes in the past five weeks.
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