* Oil nears $138 as Brazil's oil workers threaten strike
* Iran tests more missiles
* IEA sees slower oil demand growth in 2009
(Recasts, updates prices)
By Jane Merriman
LONDON, July 10 (Reuters) - Oil rose on Thursday to near
$138 a barrel due to escalating tensions between Iran and the
West and threats of an oil workers' strike at Brazil's
Petrobras next week.
The upside was limited by International Energy Agency
forecasts for a more comfortable supply outlook next year.
U.S. crude <CLc1> rose $1.77 to $137.82 a barrel by 11:33
a.m. EDT (1533 GMT). London Brent crude <LCOc1> traded up $1.63
at $138.21 a barrel.
The threatened five-day strike at Petrobras
<PETR4.SA><PBR.N> strike would 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 cease-fire 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 Marguerita Choy)
