Oil prices have once again hit new highs today, trading up all the way to $118.05, before cooling off slightly, and are currently sitting at $117.85.

The main concern fueling today's move is over supplies from some of the world's major oil producing countries. Nigeria is on the list, as a joint venture of Royal Dutch Shell PLC (NYSE: RDS) stated that it would be reducing its output in April and May by around 169,000 barrels a day. This comes in response to a militant attack on one its pipelines last week.

This is really nothing new to Nigeria, which over the past two years has been the victim of multiple attacks on its oil infrastructure. The country is a major supplier to the the United States, and over the past 2 years the country has seen its oil output fall by a pretty hefty 25%. All the result of militant attacks.

Oil prices are once again trading at record highs today following a very bullish inventory report from the U.S. Energy Department. Prices had been down earlier in the session, but are currently trading up $3.90 to $94.28 after setting a new record of $94.56 earlier in the session.

Today's price move comes in reaction to the weekly inventory report which showed that America's oil supplies have dropped to a new 2-year low. Leading into today's report, analysts had been expecting to see a rise last week of 400,000 barrels of crude, but were shocked to discover that supplies actually fell by 3.89 million barrels.

On Monday I wrote a post posing the question of if and or when we will be seeing $100 oil. In that article I stated that I felt we were definitely heading to $100 oil, but that it would probably take a couple more weeks to get there. That was, unless we got another big miss in inventories, which we now have seen.

Oil prices moved to new highs today as traders continue to weigh concerns coming out of the Middle East. After hitting a new high of $92.22 earlier in the session, prices are now trading up $1.25 to $91.71.

The reasons for today's move are once again tensions in the Middle East, which have helped crude prices jump over 7 percent since Tuesday. There are several factors that are leading to rising prices, so let's take a closer look at each of these contributing factors.

The first factor is tension between Iraqi Kurds and Turkey. This began last week when Kurd rebels from Northern Iraq invaded Turkey and killed 12 members of the Turkish army. This has resulted in Turkey amassing around 100,000 troops along the border between the two countries. There have been reports that Turkey has been firing artillery across the border, and reportedly shelled three different villages in Northern Iraq yesterday.

There have also been reports of an altercation between Israel and Lebanon yesterday. Apparently the Lebanese army fired on Israeli warplanes. This raises the fear that if violence escalates then it would pull in some of the larger oil producers in the region.

When OPEC met today, the twelve nation oil cartel decided to increase its daily output, but you wouldn't have guessed that by watching oil prices today. Oil companies like Exxon Mobil Corp. (NYSE: XOM) had a great afternoon of trading as oil traded up to close at a record high $78.23.

Earlier today we saw how OPEC, led by Saudi Arabia had decided that it would increase output by 500,000 barrels a day, but the market looked past this and instead decided to focus on government data that indicated a supply crunch later in the year, and reports that today's increases will not be able to meet the growing demand.

According to the Energy Department , global petroleum consumption could easily increase 1.27 million barrels to 85.7 million barrels a day this year, and that demand will increase by 1.8 percent, to 87.2 million barrels a day in 2008.

The report contradicts the opinions of several OPEC countries which have asserted that supply and demand are in good balance at this time. The market will get a better picture of the current situation tomorrow when we get our weekly inventory report from Energy Information Administration. Analysts are expecting to see a draw of 2.7 million barrels last week.