* Oil rises as IEA cuts supply forecasts
* Israel-Iran tensions support
* Saudi says will pump more oil but not sell at discount
(Updates with settlement, adds results of MasterCard survey on
U.S. gasoline demand)
By Matthew Robinson
NEW YORK, July 1 (Reuters) - Oil prices rose on Tuesday on
forecasts global supplies will struggle to keep pace with
demand and concerns tensions between Israel and Iran could lead
to a disruption of exports from the OPEC nation.
U.S. crude <CLc1> settled up 97 cents at $140.97 a barrel,
after hitting an intraday record high of $143.67 a barrel on
Monday. London Brent crude <LCOc1> gained 84 cents to settle at
$140.67 a barrel.
The International Energy Agency on Tuesday cut its global
oil supply capacity forecast by 2.7 million barrels per day to
95.33 million barrels per day by 2012. []
The cut offset downward revisions to expected demand as
high prices bite into fuel use in some consumer nations, such
as the United States.
"The IEA report today was a little bit bearish on the
demand side, but on every other side it was a little bit
bullish," said Christopher Bellew of Bache Financial.
The U.S. Energy Information Administration on Monday
slashed U.S. oil demand figures for April, knocking oil from
its record peaks. U.S. retail gasoline demand fell by 2.1
percent last week compared to a year ago, MasterCard Advisors
said. []
Concerns that tensions between Israel and Iran could
disrupt supplies from the Organization of Petroleum Exporting
Countries' second biggest oil producer also supported prices.
Speculation has mounted that Israel plans to attack Iran's
nuclear facilities, which Tehran says are for purely peaceful
purposes, following an Israeli air force exercise last month.
The U.S. State Department on Tuesday criticized reported
comments by an unidentified senior U.S. defense official who
told ABC News there was an increasing likelihood Israel would
attack Iran over its nuclear program. []
Iran's Revolutionary Guards has said if Iran were attacked
it would impose controls on shipping in the Strait of Hormuz.
About 40 percent of all seaborne oil trade passes through the
Strait of Hormuz, accoring to the EIA.
OPEC President Chakib Khelil said on Tuesday the cartel did
not have enough spare capacity to replace Iranian oil, if
Tehran were to cut exports due to an attack. []
Oil prices have jumped nearly seven-fold since 2002 as
supplies struggle to keep pace with demand from emerging
markets like China.
In addition, a surge in cash flows from investors seeking
to hedge against the falling dollar and inflation have helped
support a 40 percent rise in prices this year alone.
Ali al-Naimi, oil minister for OPEC kingpin Saudi Arabia,
said on Tuesday his country was willing to provide more oil to
markets, if needed, but he added it would not discount crude
prices to encourage buying.
"We have said more than once we don't like these high
prices ... We have nothing to do with where the price is
today," Naimi said.
Analysts have said the kingdom, one of the few OPEC
countries with substantial spare oil capacity, could help bring
down the soaring crude market by cutting prices to a level that
would encourage energy companies to build up inventories.
OPEC insists markets are well supplied and blamed rising
crude prices on speculation.
Weekly U.S. oil inventory data, due on Wednesday, is
expected to show a 100,000-barrel fall in crude stocks, a
200,000-fall in gasoline stocks, and a 1.9-million-barrel build
in distillates. []
(Reporting by Matthew Robinson and Robert Gibbons in New
York. Ikuko Kao in London and Chua Baizhen and Luke Pachymuthu
in Singapore; Editing by Christian Wiessner)
