* OPEC supply rises for third consecutive month
* Tropical Storm Edouard threatens oil and gas
infrastructure in Gulf of Mexico
* Tension over Iran nuclear programme and key oil route
* Gunmen kidnap two French expatriates in Niger Delta
(Updates prices, adds quote)
By Golnar Motevalli
LONDON, Aug 4 (Reuters) - Oil fell below $124 a barrel on
Monday, pressured by evidence of rising OPEC output but
supported by worries about supply disruption as a tropical storm
threatened facilities in the U.S. Gulf of Mexico.
Concerns tension over OPEC producer Iran's nuclear programme
could halt exports also underpinned the market.
U.S. light crude <CLc1> was down $1.17 a barrel at $123.93
by 1455 GMT. London Brent crude dipped by $1.06 to $123.12.
Prices have recovered from a low hit last week of $120.42,
the weakest since early May but remain far below the record of
$147.27 struck on July 11.
They reached a session high of $126.35 early on Monday
before easing after a Reuters survey showed OPEC supply rose for
a third consecutive month in July mainly because of increased
output from the world's top exporter Saudi Arabia.
The bearish impact was countered by Tropical Storm Edouard,
which formed near a major oil and gas producing area of the
northern Gulf of Mexico on Sunday, the U.S. National Hurricane
Center said.
"The main factor is the storm in the U.S. Gulf, there's
going to be a bit of short-covering there," said Olivier Jakob
of Petromatrix.
The storm was expected to come ashore at close to hurricane
strength in a few days on the Texas coast.
Oil firms, including Royal Dutch Shell and ExxonMobil Corp,
said on Sunday production was unaffected so far, but they were
preparing for possible evacuations of workers and temporary
output shutdowns.
Traders were also nervous supplies could be disrupted as a
result of tension between the West and the world's fourth
largest oil producer Iran.
The head of Iran's revolutionary guard was quoted as saying
on Monday that Iran could easily close the Straits of Hormuz, a
key Gulf shipping route, if it were attacked over its nuclear
programme, choking off world oil supplies.
Mohammad Ali Jafari's comments followed a telephone meeting
between Iran and representatives of six world powers about
Tehran's nuclear programme in which the Islamic Republic said it
would press ahead in spite of a demand to halt the work.
Tehran failed to meet Saturday's informal deadline to
respond to a package of incentives offered by the six powers.
Oil supplies have already been disrupted from Nigeria, the
world's eighth largest oil exporter, as a result of militant
attacks that have cut about a fifth of its production.
Gunmen kidnapped two French expatriates near the country's
oil industry hub of Port Harcourt in the restive Niger delta,
military and security sources said on Sunday.
(Reporting by Fayen Wong in Perth, Ikuko Kao and Golnar
Motevalli in London; editing by Barbara Lewis)
