UPDATE 3-Oil slips after record $11 surge to new high

                                
 (Updates prices, adds BP CEO comments)
                                
 By Jonathan Leff
                                
 SINGAPORE, June 9 (Reuters) - Oil slipped on Monday as
traders took profits from crude's biggest one-day jump ever,
but OPEC's resistance to pumping more oil kept prices near
their latest record high.
                                
 U.S. light, sweet crude for July delivery <CLc1> fell 93
cents to $137.61 by 0409 GMT, softening as the dollar rebounded
and the threat of economic damage from high costs mounted.
                                
 But traders gave up little of the unprecedented $10.75
surge on Friday, when oil hit a new record of $139.12 amid
frenetic buying triggered by the slumping dollar and comments
by an Israeli minister about a possible attack on Iran, the
world's fourth-largest producer.
                                
 A forecast by investment bank Morgan Stanley that oil
prices could top $150 a barrel by the July 4 U.S. holiday added
to Friday's speculative fever, taking two-day gains to more
than $16 a barrel and reversing two weeks of losses.
                                
 Oil's six-year-long rally has gathered pace this year, with
prices rising about 40 percent since January as funds hedge
against the dollar and some bet that long-term oil supplies
will struggle to keep up with demand in the decades ahead.
                                
 "What's driving this ultimately is compound consumption.
You can't put 40 million cars a year on the road and think
we're going to consume less," said Greg Smith, who manages $500
million in futures as the head of fund Global Commodities in
Australia.
                                
 Oil's direction has also become increasingly intertwined
with the dollar, which edged up against the yen on Monday. The
greenback slumped on Friday after data showed the U.S. economy
lost jobs for the fifth straight month and the unemployment
rate shot up to its highest in more than three years. [USD/]
                                
 At the weekend, key OPEC officials maintained they saw no
need to consider pumping more oil now, despite the price surge
and Australian Prime Minister Kevin Rudd's call for G8 nations
to "apply the blow-torch" to force producers to pump more
crude.
                                
 "I think there is enough oil in the market, I did not hear
anybody calling for a meeting," Shokri Ghanem, head of Libya's
National Oil Corporation and the country's top oil official,
told Reuters in an interview. [ID:nL08325671]
                                
 OPEC, supplier of more than a third of the world's oil, is
next scheduled to meet on Sept. 9 to discuss oil policy.
                                
 Saudi Oil Minister Ali al-Naimi and his Pakistani
counterpart agreed on Sunday that oil's surge was not linked to
fundamentals, the Saudi Press Agency reported. [ID:NL08317226]
                                
 While consumer nations have often urged the cartel to tame
prices by pumping more crude, Group of Eight energy ministers
meeting in Japan at the weekend focused on domestic efficiency
and technology as the long-term solution to record oil,
refraining from a call to pump more crude now. [ID:nSP30383]
                                
 OPEC ministers have repeatedly blamed speculation and other
factors for the surge in prices. BP <BP.L> CEO Tony Hayward
said the rise reflected imbalanced fundamentals.
                                
 "In a well functioning market where supply and demand are
balanced, prices should be stable. Where prices are high,
however, they show that supply is not responding adequately to
rising demand," he told a conference in Kuala Lumpur.
[ID:nSP129870]
                                
 Further support last Friday came from remarks by Israel's
transport minister that an attack on Iran's nuclear sites
looked "unavoidable." It was the most explicit threat yet
against Tehran from Prime Minister Ehud Olmert's government.
[nL06903819]
                                
 The comments by Shaul Mofaz sparked criticism from defence
officials and political pundits, who said they may be related
to a power struggle in the centrist Kadima party as Prime
Minister Ehud Olmert fights a bribery scandal. [ID:nL08269095]
                                
 DEMAND KEY
                                
 Oil's latest boom has heightened the risk to economic
growth in major consumer countries including the United States,
whose economy already is hobbled by a housing crisis.
                                
 Some analysts say the market may be overlooking the subtle
erosion in oil demand, which may not become more visible until
later this year, setting prices up for a sharp pull-back.
                                
 "Until Q4, there certainly appears to be additional spike
risk in an impatient market. But when the data becomes
available, the price action could be as sharp on the way down
as on the way up," Lehman Brothers analysts said in a report.
[nSP234482]
                                
 Asian growth may be hit soon as governments from Indonesia
to India cut fuel subsidies, while U.S. consumers are being
forced to bear record costs.
                                
 In the world's biggest consumer, whose gasoline use alone
accounts for over a tenth of the world's oil demand, the
average retail gasoline price topped $4 a gallon for the first
time, a survey by the AAA travel group showed on Sunday.
[ID:nN08522275]
                                
 Some warned of worse to come.
                                
 "I think it will go higher," said Ghanem, who is also head
of Libya's OPEC delegation. "Easy, cheap oil is over, peak oil
is looming."
 (Reporting by Jonathan Leff; additional reporting by Bernard
Woodall and Ramthan Hussain; Editing by Ian Geoghegan)