UPDATE 7-Oil rallies 2 pct to near $120 on supply worries

                                
 (Updates prices, details on International Energy Forum, adds
comments from U.S. President Bush)
                                
 NEW YORK, April 22 (Reuters) - Oil surged more than $2 to
record highs near $120 a barrel on Tuesday on supply concerns
from Nigeria and the North Sea.
                                
 U.S. crude <CLc1> rose $1.49 to $119.06 a barrel by 2:25
p.m. EDT (1825 GMT) after hitting an all-time peak of $119.90
earlier. London Brent crude <LCOc1> gained $1.42 to trade at
$115.85 a barrel, after rising to a record peak of $116.75.
                                
 Oil's fresh highs have extended a rally that has seen
prices climb more than five-fold since 2002, driven by booming
demand from emerging markets, such as China, that has coincided
with long-term supply constraints.
                                
 The slumping U.S. greenback, which tumbled to fresh lows
against the euro on Tuesday, has also helped boost
dollar-denominated commodities like oil and attracted
speculative inflows from hedge funds. [ID:nN22296501]
                                
 "The trend is up and the market didn't break down when it
moved lower in the morning, and you have the weak dollar and
the supply disruptions are in the mix," said Eric Wittenauer,
analyst at Wachovia Securities.
                                
 Pipeline attacks in OPEC member Nigeria last week shut
169,000 barrels per day (bpd) of Bonny Light production,
forcing Royal Dutch Shell Plc <RDSa.L> to declare force majeure
on crude oil exports. [ID:nL21117737]
                                
 Nigerian rebels also attacked two Shell oil pipelines in
the Niger Delta on Monday. [ID:n21129451]
                                
 Management and union officials are in talks to avoid a
planned two-day strike at Scotland's Grangemouth refinery,
which could force the shut-in of some oil and natural gas
production from the North Sea. [ID:nL22601976]
                                
 Oil producers gathered in Rome for the International Energy
Forum said they can do nothing to halt oil's rally and the
world might have to live with even higher prices if it wants
supplies for the future. [ID:nL22840262]
                                
 Ali al-Naimi, oil minister to OPEC kingpin Saudi Arabia, on
Tuesday said a lack of investment in crude and refining
capacity -- not a lack of reserves -- was driving prices
higher. [ID:nL22855792]
                                
 "Recently, I have observed an unprecedented level of
uncertainty, doubt and even fear in discussions about the
future of energy and its impact on global economic prospects,"
Naimi said.
                                
 "I can assure you unequivocally that the world is not
running out of oil."
                                
 Rising energy costs and the wider U.S. economic crisis have
forced analysts to revise downward oil demand growth forecasts
for the world's largest consumer, which has lobbied OPEC to
increase output to help lower prices.
                                
 U.S. President George W. Bush on Tuesday said he was
concerned about record-high crude oil and gasoline prices, and
said the United States needs to tap an Alaskan wildlife refuge
to boost supply. [ID:nN22361581]
                                
 Despite the U.S. economic woes, demand from emerging
economies continues to rise. China's oil demand leapt 8 percent
in March from a year ago, the fastest rate in 19 months as
refiners boosted imports ahead of the Olympics.
[ID:nPEK292273]
 (Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons
in New York; Jane Merriman in London; Felicia Loo in Singapore,
editing by Marguerita Choy)