Oil prices have risen to their highest levels since the start of the Iraqi war on concerns about the loss of Iraq's exports and a sharp cut in Nigerian output following ethnic violence.
US light crude was up 46 cents at $30.83 a barrel this morning while London's May Brent crude was up 56 cents at $27.38 a barrel.
"The thing that's dragging crude up is the fact that Nigerian sweets are quite a significant input into US refineries for the summer driving season," said Mr David Thurtell, commodities strategist at Commonwealth Bank in Sydney.
Low-sulphur Nigerian crude, known as sweet crude, produces a high yield of gasoline when processed making it an ideal grade for US refiners who should be cranking up gasoline output ahead of the peak-demand summer season.
Nearly 40 per cent of Nigeria's 2.2 million barrels of daily output has been shut down after bloody clashes between tribal groups in the oil-rich Niger Delta. Despite a ceasefire, foreign oil firms consider it too unsafe to return to oilfields.
Africa's biggest producer is one of the six biggest oil exporters to the United States. More than 560,000 bpd of Nigerian crude landed on US shores last year.
Oil fell steeply last week after the US invasion of Iraq, but prices have recovered up to 14 per cent in the last five days as US forces met stiffer resistance the closer they drew to Baghdad, raising concerns the war may be longer than first expected.
Iraqi crude exports, about 1.8 million bpd before hostilities began, have come to a standstill and added to fears of shortages in global oil markets.
But supplies from other Middle East producers, accounting for 40 per cent of world exports, have increased recently and oil shipments from the Gulf have not been disrupted.
OPEC has said it will fill any supply disruption resulting from Iraq or Nigeria, although officials have said there is no shortfall in supply currently.