Worker at GrangemouthIt wasn’t so long ago that the world worried when oil would reach $100 per barrel. Now oil is close to $120 and shows no sign of slowing down.

The record price hike was due to nearly North Sea production was shut down yesterday because of a strike at the Grangemouth refinery in Scotland. This kept shut a pipeline that carries 40 percent of Britain’s crude production.

BP has had to closed the Forties Pipeline System, a network that carries 700,000 barrels a day of oil from 50 North Sea Fields, because the refinery stopped supplying it with power and steam.

Supply shortages are expected to get worse over summer, which is hurricane season in the Gulf of Mexico. In addition, demand usually rises in hot months when air-conditioning units are operating at full blast and this could cause oil prices to spike even higher.

The oil price was also supported by concern over a surge in violence in oil-rich southern Nigeria, which led to five policemen being shot dead on Sunday. Attacks by militia forces forced Royal Dutch Shell and ExxonMobile to shut down oil production temporarily two days ago.

Traders were also spooked by continued tensions between the United States and Iran, the world’s fourth-largest oil producer. A cargo ship hired by the US Navy fired on Iranian forces on Friday.

The betting is now on for $150 some time this year …