* Supply disruption from Nigerian unrest boosts prices
* Optimism over easing global recession buoys equity
markets
* Tensions in Iran still a factor to watch
By Jennifer Tan
SINGAPORE, June 26 (Reuters) - Oil surged above $70 a
barrel on Friday, extending a 2 percent gain the day before,
after rebel attacks on Nigerian oil facilities disrupted supply
and equity markets rallied on optimism the global recession was
ebbing.
The release of the June consumer sentiment index by the
Reuters/University of Michigan Surveys of Consumers later is
expected to reflect a mildly improving outlook for the U.S.
economy, auguring well for ailing world energy demand.
U.S. crude futures <CLc1> for August gained 36 cents to
$70.59 a barrel by 0333 GMT, off a morning high of $70.77 and
after settling at $70.23 in the previous session. London Brent
crude <LCOc1> rose 28 cents to $70.06
Oil is on course for a 1.5 percent gain this week, buoyed
by optimism over a potential economic recovery that has lifted
prices from below $40 over the past three months.
"Worry over the geopolitical situation is a big factor
right now, and that's what's giving the market traction," said
Peter McGuire, managing director of Commodity Warrants
Australia, referring to the situation in Iran.
"We had a correction earlier in the week, and the
technicals still look a little bearish, but you can't rule out
the fundamentals, and you can't rule out the geopolitical."
About 20 people have been killed in protests after Iran's
June 12 presidential election, the worst unrest since the 1979
Islamic revolution. []
Investors are also keeping their eyes peeled on Nigeria,
where President Umaru Yar'Adua on Thursday offered amnesty to
gunmen in the Niger Delta who lay down their weapons by Oct. 4,
a bid to end unrest which has cost Africa's top oil exporter
billions of dollars in lost revenue. []
The main militant group, the Movement for the Emancipation
of the Niger Delta (MEND), sabotaged a Royal Dutch Shell
<RDSa.L> oil pipeline on Thursday, the latest act in a
month-old campaign which has shut in at least 133,000 barrels
per day. The attack helped push oil to near $71 a barrel.
[]
Fuelling oil's rise, Exxon Mobil <XOM.N> said its huge
Baytown refinery suffered an operational glitch that triggered
flaring, sparking worries the largest U.S. oil refinery could
tighten gasoline stockpiles during this summer's peak demand
driving season. []
Firmer Asian stocks on the back of Wall Street's rally also
lent support to oil, with shares outside Japan <.MIAPJ0000PUS>
climbing 1 percent and Japan's Nikkei <> up 0.2 percent.
A further boost came from a fall in the dollar against most
major currencies on Friday, extending losses the previous day,
as investors shifted funds back into risky assets after the
Federal Reserve this week appeared to confirm it would keep
interest rates low for a while. []
The Reuters/University of Michigan final June consumer
sentiment index, due at 1355 GMT, is expected to show a reading
of 69.0 compared with 68.7 in the May report, a Reuters poll of
economists showed.
(Editing by Ben Tan)
