* Oil continues rally on U.S. rescue plan
* Saudi trims oil supply to majors
* Nigerian rebels declare unilateral ceasefire
* U.S. oil sector recovering from Ike
(Adds details on U.S. oil sector recovery)
By Joe Brock
LONDON, Sept 22 (Reuters) - Oil rose more than $3 to $108 a
barrel on Monday, continuing a rally sparked by the United
States' rescue plan for its financial sector.
Sweeping government measures to rescue the financial system
and restore confidence in shaky markets spurred gains across
markets on Friday, when oil rose almost 7 percent to cap its
biggest three-day rally in a decade.
U.S. crude for October delivery, which expires Monday
<CLc1>, rose $3.46 to $108.01 a barrel by 1346 GMT.
London Brent crude <LCOc1> traded up $3.53 to $103.13.
"The key driver continues to be the U.S. rescue package
which has changed the sentiment in the oil market," said Bank of
Ireland analyst Paul Harris.
"Oil had fallen back below $100 a barrel last week on demand
worries, but the package has gone some way to easing those
concerns. However, I don't think there is enough clarity yet to
see prices go significantly higher."
Oil has tumbled from record highs over $147 a barrel in
mid-July, weighed down by growing evidence that high energy
costs and economic woes are undercutting global fuel demand.
Further pressure came last week as financial sector turmoil
sent investors out of commodities and into safer havens, sending
oil to a seven-month low of $90.51 a barrel.
The slow recovery of the U.S. oil sector after Hurricane Ike
caused the biggest disrtuption to the nation's energy supplies
since 2006 has supported prices.
Nearly 90 percent of oil production in the U.S. Gulf of
Mexico, home to a quarter of all U.S. oil output, remains shut
along with seven refineries. []
Oil prices were also supported on Monday by news China
increased crude imports 11.54 percent in August compared with a
year earlier, recovering from a steep July fall, the General
Administration of Customs said on Friday, confirming earlier
data. []
"The Chinese import news is a sign of recovery, and a good
indication that oil prices could get back up again." said
Christopher Bellew of Bache Financial
Industry sources also said on Monday that top oil exporter
Saudi Arabia has trimmed oil supplies to international majors
and U.S. refiners since the start of September. []
However, oil's rise on Monday was capped by news that
Nigeria's main militant group had begun a unilateral ceasefire
on Sunday after a week of clashes with the military and attacks
on oil installations which cut output in Africa's top producer.
[]
(Reporting by Joe Brock, Matthew Robinson, David Sheppard in
London; Fayen Wong in Perth)
