(Adds quote, update prices)
By Ikuko Kao
LONDON, Feb 19 (Reuters) - Oil rose on Tuesday to the
highest level in a month, above $98 a barrel, driven by
expectations that supplies will be tight.
U.S. crude <CLc1> was up $2.60 at $98.10 a barrel by 1404
GMT, having climbed as high as $98.35. London Brent crude
<LCOc1> rose $2.10 to $97.01.
U.S. crude struck a record high price at $100.09 on Jan. 3.
Tuesday's rally extends four days of gains, although trade
was limited on Monday by a U.S. public holiday.
The market is on edge over a quarrel between OPEC producer
Venezuela and the world's biggest oil company, Exxon Mobil
<XOM.N>.
But the Organization of the Petroleum Exporting Countries
(OPEC) has said it thinks there is enough oil in the market and
is not expected to increase supplies. It may even cut them.
"With the next OPEC meeting two weeks away, we do not know
what they are going to do," said Olivier Jakob of energy
consultancy Petromatrix.
OPEC President Chakib Khelil told Reuters on Monday
"production is not going to increase -- it will either decrease
or be stable".
Prices began to rally last week after Venezuela cut exports
to Exxon Mobil, but stopped short for now of a wider disruption
to the United States, the world's biggest oil consumer.
Venezuelan President Hugo Chavez said on Sunday the state
could sue Exxon for unpaid oil taxes and repeated threats to cut
oil sales to the United States.
Exxon said it was still prepared to talk to Caracas about an
amicable settlement. It has won court orders to freeze $12
billion in Venezuelan assets to ensure compensation for an oil
project Chavez nationalised last year.
RUSSIA A CONCERN
The market is also worried about supplies from Russia after
LUKOIL <LKOH.MM> halted oil supplies to German refineries in
February over a pricing dispute.
Product markets rose more steeply than crude.
New York's RBOB gasoline futures <RBc1> hit a session high
of $2.5676 a gallon, the highest since it reached a record high
of $2.5785 on Jan. 3.
London's gas oil futures <LGOc1> hit its record high of
$888.75 a tonne.
Concerns about supply disruption are offset by expectations
that a slowdown in the United States, the world's biggest oil
consumer, could reduce oil demand.
Technical analysts, who predict future price moves on the
basis of interpretation of charts, also said that in the near
term prices could struggle to break through the $98 a barrel
level.
If they did so, however, they would be on course to head
back towards the record of more than $100 a barrel.
"The snap recovery from key technical support highlighted
last week put $100 back in focus," Citigroup said in a research
note.
(Additional reporting by Chua Baizhen in Singapore)
