UPDATE 4-Oil dips after record $11 surge to new high

                                
 (Updates prices, adds Goldman analyst para 4)
                                
 By Jonathan Leff
                                
 SINGAPORE, June 9 (Reuters) - Oil fell by more than $1 on
Monday as traders booked profits from crude's biggest one-day
jump, 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 $1.12
to $137.42 by 0703 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 record $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 oil 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.
                                
 Goldman Sachs' global head of commodities research Jeffrey
Currie echoed that call on Monday, telling a conference that
"demand for oil is weak, but supplies are even weaker".
                                
 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 step output.
                                
 "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]
                                
 G8 REFRAINS
                                
 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.
[ID:nSP30383]
                                
 OPEC ministers have repeatedly blamed speculation and other
factors for the surge in prices. BP <BP.L> CEO Tony Hayward
said the extreme volatility in prices was because "supply is
not responding adequately to rising demand". [ID:nSP129870]
                                
 Further support last Friday came from remarks by Israel's
transport minister that an attack on Iran's nuclear sites
looked "unavoidable", the most explicit threat yet against
Tehran from Prime Minister Ehud Olmert's government.
[nL06903819]
                                
 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 become more visible later this
year, as higher prices start to bite in Asia.
                                
 "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]
                                
 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)