Oil prices climbed over $57 a barrel today as Russia stopped crude supplies through a pipeline that meets a fifth of Germany's demand.
News of the disruption to supplies pushed oil prices through the $57-a-barrel barrier, after they fell to around the $55 level last week on warm US weather which lowered demand.
US light sweet crude rose 89 cents to $57.20 in New York trade, while in the UK Brent crude stood at $56.71 - up $1.08.
A Russian oil pipeline carrying supplies across Belarus to Poland and Germany stopped operating overnight in a increasingly bitter trade dispute between Moscow and Minsk, Polish officials said today.
Disruptions hit Transneft's Druzhba pipeline before supplies were stopped at Poland's border with Belarus.
The problems arose after Belarus began legal action against Transneft for failure to pay a new oil shipment tax on supplies piped through Belarus.
The trade dispute between Belarus and Moscow initially began after Russian energy giant Gazprom forced Belarus to accept a significant increase in the price of Russian gas.
Russia is the world's second largest oil exporter and supplies around a fifth of Germany's needs. The Druzhba, or Friendship, pipeline to Central Europe is one of the world's biggest.
News that Saudi Arabia planned to cut output also helped to drive crude prices higher.
Saudi Arabia, the world's largest oil producer, said it would cut output by 158,000 barrels a day from 1 February - in line with the latest production cuts set out by oil cartel Opec in an effort to boost prices.
Unusually warm temperatures in the US northeast region - the biggest market for heating fuel - drove oil futures down about 8% last week compared with the final week of 2006.
