* Oil rises more than $1, recovers from 3-month low
* BTC oil pipeline opening may take up to two weeks
* Supply concerns in Nigeria, Iran back in focus
By Santosh Menon
(Updates throughout, previous SINGAPORE)
LONDON, Aug 7 (Reuters) - Oil recovered from three-month
lows to rise by more than $1 on Thursday as supply concerns
returned to centre stage in a market that has come under
pressure from growing evidence of slower fuel demand.
U.S. crude <CLc1> rose $1.11 to $119.67 a barrel by 0924
GMT, after the contract recovered from a three-month-low hit in
the previous session.
London Brent crude <LCOc1> climbed $1.28 to $118.28.
Supply concerns came to the fore again, as the
Baku-Tbilisi-Ceyhan pipeline with a capacity of one million
barrels per day of Azeri light crude remained closed following a
fire, for which Kurdish separatists claimed responsibility.
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A source in Turkey's state-owned pipeline company Botas said
the pipeline fire would last for two more days and it could take
up to two weeks for the pipeline to restart.
The pipeline explosion in Turkey highlights the growing
influence of geopolitical factors on the oil market.
Oil supplies from OPEC member Nigeria have been repeatedly
disrupted by militant attacks, while escalating tension between
Iran, the world's fourth largest producer, and the West over
Tehran's nuclear programme has the potential to cripple global
oil supplies.
However, oil is almost 20 percent off the record of $147.27
a barrel hit on July 11 and prices have fallen across the
commodities complex.
"While in our view many of the fundamentally bullish
elements of the market remain in place, buying interest has for
now taken a step back," Harry Tchilinguirian, oil analyst at BNP
Paribas, said in a research note.
UBS analyst Jan Stuart said oil market fundamentals did not
warrant "this sudden and significant bearish turn" and the
supply risk had not reduced and could provoke a whiplash price
surge.
Data from the U.S. government's Energy Information
Administration on Wednesday showed a much steeper than expected
build in crude stocks, the latest sign soaring fuel costs and an
ailing economy have reduced oil demand.
Crude oil inventories rose by 1.7 million barrels in the
week to Aug. 1, beating expectations of a 300,000-barrel build.
Distillate stocks, including heating oil and diesel, rose by 2.8
million barrels, also above forecasts.
However, gasoline stocks fell by 4.4 million barrels, much
steeper than the 1.2 million barrel draw analysts had predicted.
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(Additional reporting by Chua Baizhen; Editing by Barbara
Lewis)
