(Updates with shift in market direction, settlement prices)
By Matthew Robinson
NEW YORK, June 12 (Reuters) - Oil prices rose on Thursday
after concerns about a possible strike in Nigeria, Africa's top
producer, stirred supply worries.
U.S. crude <CLc1> settled up 36 cents at $136.74 a barrel,
following a $5 surge in prices on Wednesday. London Brent crude
<LCOc1> gained $1.07 to settle at $136.09 a barrel.
Oil dipped as low as $131.55 earlier on the stronger
dollar, before rebounding on news Nigeria's senior oil workers
union renewed a strike threat against Chevron <CVX.N>, raising
supply worries. []
A strike would further slash oil output in Nigeria, where a
fifth of capacity has been shut in since early 2006, when
ethnic militants in the Niger Delta began a violent campaign of
sabotage against oil installations.
Oil's earlier losses came as the dollar gained on a
government report showing total sales at U.S. retailers rose 1
percent in May, twice as much as expected. [].
A weak dollar in recent months has pushed investors into
commodities as a hedge against inflation.
Oil's earlier losses also came amid news that U.S.
regulators were seeking a deal with their counterparts in
Britain to impose position limits on U.S. crude contracts
traded on the ICE Futures Europe exchange. []
The move by the U.S. Commodity Futures Trading Commission
and Britain's Financial Services Authority could shake some
speculators out of the market, analysts said.
"It is sending the message that the CFTC will be taking
action. This is probably the first of many steps they are going
to implement," said Rob Kurzatkowski, futures analyst for
optionsXpress in Chicago. "It has implications for larger
institutional traders -- pension funds, hedge funds -- that
have been in the oil markets,"
Crude oil prices have jumped roughly 40 percent this year,
hitting an all-time high above $139 last week. Commodities
markets have boomed over the past six years as demand from
emerging economies tests supply growth.
Oil consuming and producing nations, often at odds over the
cause of the spike in prices, will meet in Saudi Arabia on June
22 to seek a solution to rising energy costs, which have
sparked riots across the globe.
U.S. officials have blamed the surge in prices on
fundamentals, and have called on the Organization of Petroleum
Exporting Countries to raise output to help cool down markets.
But OPEC members blame speculators for high prices and
insist they can do nothing to lower prices.
"The market fundamentals are not affecting prices. The
problem is the economic crisis in the United States, which led
to a fall in the dollar's value, and threats against Iran,
which increased geopolitical tensions," OPEC President Chakib
Khelil said, according to Algerian state news agency APS.
"Supply at present exceeds demand, and there is a surplus
of around 500,000 barrels per day," Khelil said, adding that
OPEC would hold its scheduled meeting on Sept. 9 to "evaluate
the market and take decisions to stabilize it."
(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos
in New York; Luke Pachymuthu in Singapore; Barbara Lewis and
Ikuko Kao in London; Editing by Walter Bagley)
