(LONDON) - Oil prices rocketed to historic highs above 118 dollars on Tuesday, lifted by the tumbling dollar, unrest in Nigeria and OPEC's reluctance to increase output, traders said.

New York's main oil futures contract, light sweet crude for delivery in May, jumped to an all-time high of 118.45 dollars.

At the same time, London's Brent North Sea crude for June hit a record 115.53 dollars a barrel.

"For the moment, there does not seem to be anything stopping the price juggernaut we are seeing in energy," said MF Global analyst Ed Meir.

In the foreign exchange market, the European single currency jumped to the historic 1.60 dollars level following further weak US economic data.

The weak US currency makes dollar-priced commodities like oil cheaper for foreign buyers and therefore tends to encourage demand.

"The (oil) market is still fairly tight, with OPEC reluctant to hike output, blaming speculators and the broad weakness in the dollar for driving prices higher," said Sucden analyst Andrey Kryuchenkov.

Global supply tensions were also stoked on Tuesday after Anglo-Dutch oil group Royal Dutch Shell reported an output loss of 169,000 barrels per day (bpd) after the sabotage of its key pipelines in southern Nigeria.

"Generally, we have a shut-in of 169,000 bpd as a result of the recent attacks on our pipelines," Shell spokesman Precious Okolobo told AFP.

He said the production loss followed a weekend attack on a pipeline feeding the Bonny exports terminal and Monday's sabotage of the Soku-Buguma and Buguma-Alakiri pipelines.

Okolobo said efforts were being made to "assess the extent of damage to the pipelines with a view to fixing them."

Shell said on Monday that it might not be able to honour contracts for April and May after the attacks.

Bonny along with the terminal at Forcados east are Shell's most important installations in Nigeria.

The Movement for the Emancipation of the Niger Delta (MEND) militant group, active in the west African country's oil-rich south, claimed responsibility for the attack on the Bonny terminal.

Overall, violence in the southern Delta region has reduced Nigeria's total production by a quarter since January 2006.

The price rise comes despite news that Organization of Petroleum Exporting Countries (OPEC) plans to increase production capacity by five million bpd by 2012, the cartel's secretary general Abdalla Salem El-Badri said on Tuesday.

El-Badri also said OPEC aimed to boost production capacity by nine million bpd by 2020. OPEC's current output stands at about 32 million bpd.

The 13-nation OPEC, which produces 40 percent of the world's oil, insists that there is no supply shortage in the market, with record prices driven instead by speculative financial activity.

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