(Releads, updates prices, adds analyst comments)
By Fayen Wong
PERTH, May 5 (Reuters) - Oil rose more than $1 to above
$117 a barrel on Monday, extending the previous session's 3
percent gain, bolstered by further supply disruptions in
Nigeria and geopolitical tensions between Iran and the West.
U.S. light crude for June delivery <CLc1> was up 59 cents
at $116.91 by 0926 GMT, after rising to $117.33.
London Brent crude <LCOc1> jumped 59 cents to $115.15,
after hitting $115.63 a barrel.
"Supply issues in Nigeria and tensions between Iran and the
West are at play here," said Singapore-based Victor Shum, an
energy analyst from Purvin & Gertz.
Royal Dutch Shell <RDSa.L> was forced to shut more of its
production in Nigeria after a militant attack on Saturday on a
flowstation in the oil-rich Niger Delta, where local militants
have stepped up a campaign of violence.
"A few oil delivery lines are affected and some oil has
spilled into the environment," a Shell spokesman said. Recent
violence has already cut 164,000 barrels per day (bpd) of Shell
production in Nigeria [].
In the Middle East, Iran's Foreign Ministry said on Monday
it would not consider any incentives offered by world powers
that violated Tehran nuclear rights, ruling out a key demand
that it halt uranium enrichment programme [].
The comments come just three days after major powers said
they would make a new offer to convince the Islamic Republic to
halt its nuclear plans, a process which the West believes
Tehran wants to master so that it can build nuclear weapons.
FIRM DOLLAR EYED
Renewed clashes between Turkey and Kurdish rebels in
northern Iraq also lent support to oil prices.
The Turkish army said on Saturday that it killed more than
150 Kurdish PKK fighters in air strikes in northern Iraq last
week, but the rebel group denied this and security forces in
the region also expressed scepticism [].
Purvin & Gertz's Shum also said a strong U.S. dollar has
helped to cap oil's gains.
The dollar eased marginally on Monday, but held on to most
of last week's gains, supported by expectations the Federal
Reserve will not need to cut interest rates again to cushion
the economy from the credit crisis.
U.S. oil rose $3.80 to settle at $116.32 on Friday,
bolstered by a U.S. government report that showed the economy
lost only 20,000 jobs in April, a quarter the number economists
had expected. Surprisingly strong U.S. factory order data
improved sentiment further.
The gains followed three days of losses amid concerns that
economic weakness in the United States would dent world oil
demand.
Analysts said traders were now waiting for a survey later
in the session on the U.S. service sector, as well as on Fed
Chairman Ben Bernanke's speech on Monday on mortgage
delinquencies and foreclosures.
Crude oil speculators on the New York Mercantile Exchange
cut net long positions last week, according to data from the
Commodity Futures Trading Commission released on Friday.
Net crude long positions fell to 53,311 in the week to
April 29, down from 70,562 in the week to April 22
[].
(Editing by Ramthan Hussain)
