* Israel-Iran tensions, weak dollar support prices
* Saudi says ready to boost output, raise capacity
* Nigerian militants announce unilateral ceasefire
(Releads, updates prices)
By Fayen Wong
PERTH, June 23 (Reuters) - Oil rose 30 cents on Monday as
escalating tensions between Israel and Iran countered the
impact of Saudi Arabia's promise to pump more oil and a vow by
Nigerian militants to halt attacks on oil facilities in the
delta.
U.S. light crude for August delivery <CLc1> rose 36 cents
to $135.72 a barrel by 0204 GMT, reversing earlier losses of
more than $1. London Brent crude <LCOc1> rose 17 cents to
$135.03.
Oil prices hit a record near $140 a barrel last week and
have doubled from a year ago, stoking inflation and triggering
protests worldwide, but top energy policy makers meeting in
Jeddah at the weekend offered little hope for a quick fix.
Top exporter Saudi Arabia has boosted production twice in
as many months toward 9.7 million barrels per day (bpd) next
month, its highest in over 30 years, and pledged on Sunday to
open the taps wider still if the market demanded it.
[]
It also sketched out plans to boost capacity to 15 million
bpd when the future demand warrants the investment, hoping to
soothe growing fears that the world is running out of oil, but
those measures failed to take the edge off an anxious market.
"The market took the opportunity to take profits earlier on
Saudi Arabia's promise to pump more oil, but realistically that
alone is not enough to calm the market," said Mark Pervan,
senior commodities analyst at Australia and New Zealand (ANZ)
Bank in Melbourne.
"The short-term supply situation is still very tight and
tensions between Iran and Israel are back in focus."
Iran will give a "devastating" response to any attack on
the country, its defence minister was quoted as saying on
Sunday, the latest volley in the ongoing war of words centred
around Tehran's nuclear programme. []
On Friday, the New York Times quoted U.S. officials as
saying Israel had carried out a large military exercise,
apparently a rehearsal for a potential bombing of Iran's
nuclear facilities.
Energy experts are concerned any conflict in Iran could
lead to a shutdown of the Strait of Hormuz, a waterway
separating Iran from the Arabian Peninsula through which
roughly 40 percent of the world's traded oil is shipped.
Despite world powers' offer of economic incentives to coax
Tehran into halting such activities, Iran is pressing on with
uranium enrichment "non-stop", its envoy to the U.N. nuclear
agency was quoted as saying on Saturday. []
JEDDAH OVERSHADOWED
Sunday's emergency meeting in Jeddah infused new urgency to
the ongoing dialogue of major producers and consumers,
participants said, but they acknowledged a lack of hard
measures for taming oil's rally could leave the market
underwhelmed.
"The meeting was a bit disappointing," said a European
diplomat. "The only producer that came up with any concrete
proposals was Saudi Arabia -- all the other producers just made
bland statements about future capacity plans."
In the end Jeddah was overshadowed by news from Nigeria,
where militants in the southern Niger Delta announced a
unilateral ceasefire on Sunday, the end of a week that saw two
new attacks knock an additional 340,000 bpd offline.
Community elders had appealed for the Movement for the
Emancipation of the Niger Delta (MEND) to halt their campaign
of sabotage, which has cut oil output by about 40 percent in
the world's eighth-largest exporter. []
"We are respecting an appeal by the Niger Delta elders to
give peace and dialogue another chance," MEND said, announcing
the unilateral cease-fire from June 24.
Attention later in the day could shift to new indicators on
the economic health of the United States, which consumes nearly
a quarter of the world's oil. Consumer confidence for June and
the Richmond Fed's manufacturing report are both due at 1400
GMT.
(Reporting by Fayen Wong; Editing by Jonathan Leff)
