Oil rises for 3rd session near $137 on supply worries

                                
 * Oil rises for 3rd day on Nigeria strike, Israeli-Iran
tensions
                                
 * Investors eye possible new high above $140
                                
 * Key events ahead include Fed meet, U.S. oil data
                                
 TOKYO, June 24 (Reuters) - Oil rose for a third straight
session to around $137 a barrel on Tuesday amid fears of
Nigerian supply disruptions and tensions between Israel and
Iran.
                                
 Crude for August delivery <CLc1> was up 20 cents at $136.94
a barrel by 0220 GMT, after settling up $1.38 on Monday. It had
hit a record high of $139.89 on June 16.
                                
 August London Brent crude <LCOc1> was trading up 19 cents
at $136.10 a barrel.
                                
 "The fundamentals are strong. We are all focusing on a test
of a new record high of above $140," said Tatsuo Kageyama,
analyst at Kanetsu Asset Management in Tokyo.
                                
 "Growing tensions between Iran and Israel and the strike in
Nigeria are convincing funds to buy."
                                
 Nigeria's senior oil workers union began a limited strike
at Chevron on Monday. While the stoppage has not disrupted
production yet, it added to concerns about supplies from the
OPEC nation after militant attacks shut 340,000 barrels of
daily production last week. [nL23390511]
                                
 Ongoing problems in Nigeria have been one of the supply
factors that has helped push U.S. crude up by more than 40
percent this year.
                                
 Another is tension over Iran's nuclear programme, with
analysts worried any conflict could shut the Straits of Hormuz,
a narrow waterway separating Iran from the Arabian Peninsula
through which roughly 40 percent of the world's traded oil
flows.
                                
 On Monday the European Union approved new sanctions on
Iran, including an asset freeze on its biggest bank, over its
refusal to meet demands to end its nuclear programme.
[nL23607518]
                                
 With top energy policy makers who met in Jeddah at the
weekend offering little hope for a quick fix to supply
concerns, there was little relief seen for oil prices.
                                
 "Saudi pledged to pump more crude, but other producers did
not follow, which convinced the market to take fresh positions
again," Kageyama said.
                                
 OPEC's president weighed in on the side of those saying
there is no need to pump more oil, becoming the latest cartel
member to blame speculation and the dollar for high prices.
[nL23220698]
                                
 The dollar will remain in focus over the next two days as
markets wait for the decision of the Federal Reserve's rate
setting body on Wednesday. The Fed is widely expected to leave
interest rates unchanged, but investors will be watching
closely for any hints as to whether inflation is becoming more
of a concern than economic growth.
                                
 Another key piece of data on Wednesday will be U.S. crude
oil inventories, which are likely to have risen for the first
time in six weeks last week, as imports rose for the second
week in a row, a Reuters preliminary poll showed. [EIA/S]
                                
 The poll of six analysts showed an average forecast for a
200,000-barrel rise in crude stocks, a 1.4 million-barrel gain
in distillates and a 400,000-barrel rise in gasoline
inventories last week.
 (Reporting by Chikafumi Hodo and Osamu Tsukimori; Editing by
Michael Urquhart)