Oil climbed by almost a dollar on Tuesday to hover just below last week's record high, after Nigerian rebels blew up one of Royal Dutch Shell's pipelines forcing it to cut production.

Crude prices jumped on Monday in electronic trading as news of the attack broke, but analysts said the impact on prices spilled over into Tuesday, when exchanges on both side of the Atlantic re-opened after the long weekend.

Nymex West Texas Intermediate for July delivery rose 93 cents to $133.09 a barrel - $2 off its record $135.09 a barrel. Brent crude rose 14 cents to $132.54 a barrel.

Market players were struggling to predict what the week would hold for oil after the price of crude surged by as much as 7 per cent last week, driven by collapsing confidence in the ability of supplies to meet demand within the next ten years.

Analysts at MF Global energy said money was pulled out of markets last week as investors caught on the wrong side of bets had to close out their positions.

"Whether this sidelined money will now be put to work on the long side remains to be seen, but if it does, we could start to push higher with more momentum this week," they wrote in a note to clients.

Gold prices fell back slightly in London to $924.20 an ounce, having ended the last session at $930.10. Platinum was also lower.

In agricultural markets, the price of wheat rose after influential analysts at Rabobank cut their forecast for Australia's wheat crop because of dry weather.

Rabobank cut its forecast to 20-24 million tonnes in 2008/9, from 23-26 million, saying - in spite of plenty of rain in the west - one of the driest autumns on record was unfolding on Australia's east coast.

CBOT July wheat added 6¾ cents to $7.59¼ a bushel, having hit its lowest closing price in nine months last week on expectations of a bumper crop.