CRUDE oil rose more than US$2 a barrel and gasoline climbed to a record on BP Plc's plans to shut down a North Sea pipeline, plunging Nigerian output and after a ship carrying United States cargo fired warning shots at Iranian boats.

BP shut the Forties Pipeline System over the weekend because of a two-day strike at a refinery in Scotland.

Nigeria has lost about half of its oil production amid a strike and rebel attacks, Petroleum Minister H. Odein Ajumogobia has said in an interview with Bloomberg News.

"The near-term target is US$120," said Katherine Spector, head energy strategist at JPMorgan Chase & Co in New York. "Even without the headlines, prices would have risen."

Crude oil for June delivery rose US$2.46, or 2.1 percent, to settle at US$118.52 a barrel on the New York Mercantile Exchange. Futures touched US$119.55 last Friday. The June contract rose 2 percent last week.

Prices jumped after a report that a US-contracted cargo ship fired at Iranian boats in the Persian Gulf. Iran, OPEC's second-biggest oil producer, has been in conflict with the US over its nuclear program and Iraq policy.

"The market has probably overreacted to news of the shots on the Iranian boats but nobody wants to take a chance with all of the other things that are going on," said Phil Flynn, a senior trader at Alaron Trading Corp in Chicago.

Brent crude for June rose US$2, or 1.8 percent, to US$116.34 a barrel on London's ICE Futures Europe exchange. The contract touched a record US$117.56 last Friday.