UPDATE 8-Oil sets new record near $120

                                
 (Adds detail on Shell, updates prices)
                                
 By Jane Merriman
                                
 LONDON, April 28 (Reuters) - Oil hit a new record near $120
a barrel on Monday, boosted by a string of bullish factors that
include big disruptions to Nigeria's output and a UK refinery
strike, highlighting anxieties over threats to supply.
                                
 Prices retreated from early peaks as the dollar gained
versus the euro, reflecting some expectations that the U.S.
Federal Reserve may not cut interest rates this week.
                                
 U.S. light crude for June delivery <CLc1> was up 74 cents at
$119.26 a barrel by 1450 GMT, after a record high of $119.93.
Prices are up almost 25 percent since the start of the year.
                                
 London Brent crude <LCOc1> was up 73 cents at $117.07.
                                
 "The Federal Reserve will have a chance to bolster the
dollar if it decides to hold the line on further rate
increases," Edward Meir, analyst with broker MF Global, said in
a research note. "Both these developments could possibly induce
a correction in energy prices later in the week."
                                
 Crude prices have surged more than fivefold since 2002 as
global supplies struggle to keep pace with rising demand in
emerging economies, such as China.
                                
 Years of underinvestment in new oil production means the
market could struggle to keep pace with booming China demand.
The finely-balanced supply-demand outlook has made prices
sensitive to any supply disruptions.
                                
 
                                
 NIGERIA DISRUPTIONS
                                
 Exxon Mobil <XOM.N> has had to shut nearly all of its
Nigerian oil production, totalling around 770,000 barrels per
day, due to a strike. [nL28161600]
                                
 On Sunday, unidentified gunmen killed five policemen and
seized several weapons in a raid on a police station in the
oil-rich southern Nigerian state of Rivers. [nL27385908]
                                
 Niger Delta rebels have said an April 24 pipeline attack had
shut down a further 350,000 barrels per day of production by
Royal Dutch Shell <RDSa.L>.
                                
 Shell was not available for comment. A previous bombing raid
had hit 169,000 barrels per day of Shell's Nigeria output, the
company said last week. [NL28767770]
                                
 The 700,000-barrel-per-day (bpd) Forties North Sea crude oil
pipeline remained closed on Monday due to a strike at the
210,000 bpd Grangemouth refinery over pensions [nL2653513]
                                
 Ineos, the owner of the Grangemouth refinery, expects
striking employees to return to work on Tuesday. BP has said the
Forties pipeline could then be back in operation within 24 hours
but might take a few more days to get back to full flow.
                                
 The Organization of the Petroleum Exporting Countries
(OPEC), that produces more than a third of the world's oil, has
refused to pump more, saying the market is adequately supplied.
                                
 OPEC President Chakib Khelil blamed the fall in the dollar
for high prices and did not rule out prices rising to $200 a
barrel.
                                
 "Without geopolitical problems and the fall in the dollar,
the prices of oil would not be at this level," he was quoted
saying in Algerian government newspaper El Moudhajid.
[nL28112626]
                                
 (Additional reporting by Fayen Wong in Perth; editing by
William Hardy)