* Brazil's Petrobras Campos basin oil workers to strike
* IEA sees slower oil demand growth in 2009
* Iran tests more missiles
(Adds Brazil strike, OPEC outlook, updates prices)
By Jane Merriman
LONDON, July 10 (Reuters) - Oil rose above $137 a barrel on
Thursday after workers at Brazil's state oil company Petrobras
said they would begin a 5-day strike next week.
The market had been holding in a narrow range, supported by
tensions over Iran, but the upside was limited by International
Energy Agency forecasts for a more comfortable supply outlook
next year.
U.S. crude <CLc1> for August was $1.07 up at $137.12 a
barrel by 1349 GMT. London Brent crude <LCOc1> was $1.12 up at
$137.70 a barrel.
The strike will affect all 42 Campos basin offshore
platforms, which account for more than 80 percent of Brazil's
output of around 1.8 million barrels per day. []
Iran tested more missiles in the Gulf on Thursday, while the
United States pledged to defend its allies. []
"A second day of missile tests probably has less impact on
prices than on the first day," said Mike Wittner, analyst at
Societe Generale.
Iran test-fired nine missiles on Wednesday, which it said
included ones that could hit Israel and U.S. bases.
Concern over Iran has mounted after a big Israeli military
exercise last month. The West fears Iran wants to master
technology to build nuclear weapons.
These tensions boosted gold on Thursday, which was also
supported by sagging equity markets.
The situation in the Middle East has played a part in oil's
surge this year to record levels of more than $145 a barrel.
TOLL ON DEMAND
But high prices are starting to take their toll on demand.
World oil demand growth will slow in 2009 and the need for
oil from the Organization of Petroleum Exporting Countries will
fall, the International Energy Agency said in its monthly
report. []
This could help relieve the perceived tight supply/demand
balance in the world oil market that has contributed to around a
50 percent jump in prices this year.
"We do see the potential for a build in spare capacity in
2009, that should help to improve the situation," said Lawrence
Eagles of the IEA, which advises 27 industrialised countries on
energy policy.
A pledge from Saudi Arabia to increase output this year
could help provide more of a cushion for the market, he said.
Looking further ahead, OPEC warned of growing uncertainty
over demand for its oil in its 2008 World Oil Outlook.
The Organization of the Petroleum Exporting Countries said
demand for its oil could fall to 31 million barrels per day in
2012, below current production, as additions to supply excluding
OPEC crude outpace growth in demand. []
Oil has fallen back from a record peak of $145.85 on July 3,
but had found some support from Iran tensions which helped the
market hold above $135.50 a barrel on Wednesday, a key number
for traders who use charts to track price movements.
The main militant group in Nigeria's oil-producing Niger
Delta has said it would call off a ceasefire from midnight on
Saturday after Britain offered to help tackle lawlessness in the
region that has disrupted the country's oil exports.
(Additional reporting by Felcia Loo in Singapore and Barbara
Lewis in London; editing by James Jukwey)
