* Oil rises towards $124 a barrel on technical buying
* Iran says has expanded its nuclear enrichment programme
* Nigerian rebels release some oil workers (Releads,
updates prices and analyst comments)
By Fayen Wong
PERTH, July 28 (Reuters) - Oil rose towards $124 a barrel
on Monday, rebounding from a seven-week low, in what analysts
said was technical buying and short-covering after recent
declines left the market oversold.
But analysts said worries of slowing fuel demand, which
have dragged crude prices down from their record peak of over
$147 a barrel on July 11, continued to loom over the market.
U.S. light crude for September delivery <CLc1> rose 46
cents to $123.72 a barrel by 0228 GMT. The contract fell $2.23
on Friday to settle at $123.26, after falling to as low as
$122.50, the lowest since June 5.
London Brent crude <LCOc1> rose 18 cents to to $124.70.
"I think it's just a technical bounce. The decline in
prices has probably triggered some stop-loss orders so that has
lifted prices slightly," said Gerard Burg, an analyst at the
National Australian Bank in Melbourne.
Oil has fallen over $23, or about 16 percent, in the past
two weeks on concerns that high fuel prices were battering
demand, after recent reports showed fuel consumption in the
United States and other industrialised nations had begun to
slide.
Data from the Commodity Futures Trading Commission released
on Friday also showed that speculative funds were shifting to a
net short position for the first time in 17 months.
[]
Mark Pervan, a senior commodities analyst at the Australian
& New Zealand (ANZ) Bank, said expectations that OPEC's oil
output would rise this month, amid slowing demand, were
weighing on sentiment.
OPEC's oil output is expected to rise by 200,000 barrels
per day in July from June because of higher supplies from Saudi
Arabia and Iraq, industry consultant Petrologistics said on
Friday [].
Still, geopolitical concerns in the Middle East and rebel
threats against oil installations in OPEC member Nigeria were
expected to keep a floor under oil prices, analysts said.
Iran has more than 5,000 active centrifuges for enriching
uranium, its president was quoted as saying on Saturday,
suggesting a rapid expansion of nuclear work the West suspects
is aimed at making bombs. []
President Mahmoud Ahmadinejad's announcement was likely to
annoy major powers which have offered Iran a package of
economic and other incentives to persuade Tehran to suspend its
enrichment activities.
In Nigeria, gunmen released eight foreign oil workers
seized from a vessel off the Niger Delta on Saturday but eight
other people abducted in separate incidents were still being
held, security officials said. []
Rising demand in emerging economies such as China launched
oil on a six-year rally that sent prices up seven-fold at their
peak. The sharp drop has some analysts forecasting oil prices
may have peaked, with Lehman Brothers predicting $90 a barrel
by the end of the first quarter of 2009.
(Editing by Ben Tan)
