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Mary Vega - Crude prices surpassed $119 a barrel on Tuesday as a labor clash in a refinery in Scotland and Nigeria output disruptions raised fears that demand will soar.

In Grangemouth Scotland, an oil refinery that produces 200,000 barrels a day managed by Ineos Group Holdings Plc, closed today as unions planned to strike. Although the strike hasn't started investors believe it is very probable to occur in the following days. The refinery receives oil from a pipeline system through which crude flows from over 50 North Sea fields.

Meanwhile, Nigeria, the top five exporter to the U.S. in 2007, halted production by 169,000 barrels per day due to attacks on its pipelines. Royal Deutsch Shell Plc declared force majeure on crude exports. On Monday two Shell oil pipelines in the Niger Delta were also attacked by rebels.

Crude futures for delivery in May rose 1.61 percent, or $1.89 to $119.37 a barrel on the New York Mercantile Exchange at at 2:46 p.m. The May contract expires today.

Brent crude prices rose 1.82 percent, or $2.06 to $119.37 a barrel on London's ICE Futures Exchange.

In addition, Russia, the largest producer not member of the Organization of Petroleum Exporting Countries, said it will produce less crude compared to the year before.

Saudi Arabia's oil minister Ali al-Naimi said today limited capacity along the entire supply chain is the real source of current global supply tightness, according to Reuters.

The Organization of Petroleum Exporting Countries has insisted the market has enough oil rejecting calls from consumer countries to rise production.

The weekly gasoline inventories report due tomorrow morning is expected to show a drop last week of 2.5 million barrels and an increase in oil supplies of 1.6 million barrels according to forecasts made by Bloomberg.