* Oil up on threat of Nigerian oil workers strike
* W. House does not expect Saudi Arabia supply boost
* US crude stocks down, distillates up more than expected
* Bush: more domestic drilling needed to counter high oil
(Updates with settlement prices)
NEW YORK, June 18 (Reuters) - Oil rose on Wednesday as a
strike threat by workers in OPEC nation Nigeria stoked supply
concerns ahead of a meeting of top producers and consumers
aimed at tackling soaring energy prices.
U.S. crude <CLc1> settled up $2.67 to $136.68 a barrel,
while London Brent crude <LCOc1> settled up $2.72 at $136.44 a
barrel.
Workers at the Nigerian unit of U.S. energy giant Chevron
<CVX.N> were poised to go on strike after talks between their
union and management failed. []
Further support came after the White House said it was not
expecting Saudi Arabia to announce an output increase when
producers and consumers meet in the kingdom on June 22.
[]
News the world's top oil exporter plans to ramp up output
to help bring down high prices, which touched a record near
$140 a barrel earlier this month, had weighed on prices earlier
in the week.
"The news about Nigeria workers at Chevron ready to strike
is unsettling because they produce light sweet crude, which we
want and if OPEC doesn't raise output ... that's bullish for
crude," said Mark Waggoner of Excel Futures Inc.
Rising fuel costs have caused protests around the globe,
prompting Saudi Arabia to call the meeting between producers
and consumers in Jeddah.
Oil prices have jumped nearly 40 percent this year,
extending a six-year rally that has sent prices up nearly
seven-fold on rapid demand growth from emerging economies like
China.
A surge in speculative buying by investors hedging against
inflation and the weak dollar has accelerated the rally this
year. Some analysts say rising investor flows have created an
oil "bubble" that has inflated prices beyond what supply and
demand fundamentals warrant.
U.S. President George W. Bush on Wednesday called on
Congress to lift a ban on offshore oil drilling to help ease
prices, but analysts said this would bring little quick relief
to consumers. []
"We believe this (proposal) will have a limited impact
given the long lag time to actual production and new supply
coming online," said Chris Jarvis, senior analyst for Caprock
Risk Management in New Hampshire.
Prices rebounded from earlier losses following the release
of a weekly U.S. government inventory report showing U.S. crude
oil stocks fell for a fifth week in a row, below analyst
expectations, as a rise in refinery demand offset an increase
in imports. []
Stocks of distillates, including heating oil and diesel,
rose by 2.6 million barrels, above forecasts for a
1.8-million-barrel rise.
U.S. gasoline stockpiles fell 1.2 million barrels, compared
with calls for an 800,000-barrel rise.
(Reporting by Matthew Robinson, Gene Ramos and Robert Gibbons
in New York; Margaret Orgill in London and Chua Baizhen in
Singapore; Editing by Christian Wiessner)
