* Falls to $133 on news China to raise fuel prices
* Shell shuts 220,000 bpd oil output in Nigeria
* Goldman Sachs raises oil price forecast
(adds analyst comments)
By Margaret Orgill
LONDON, June 19 (Reuters) - Oil fell $3 to $133 a barrel on
Thursday on news that China will raise retail gasoline and
diesel prices for the first time in 8 months, which will curb
demand in the world's second largest energy consumer.
Soaring energy use in China has been one of the main factors
driving oil prices to a record near $140.
"This is very significant, a watershed move which suggests
the Chinese government is prepared to risk unpopularity to curb
the growth in domestic fuel demand," said John Kemp, an
economist at RBS Sempra.
"We've already seen other Asian economies cut subsidies and
the big one to hold out, until now, was China."
The move comes just days before an emergency meeting on
Sunday in Saudi Arabia between consumers and producers to
discuss soaring oil prices.
U.S. crude <CLc1> fell $3 to $133.68 a barrel before firming
a touch to stand $2.50 lower at $134.18 at 1414 GMT.
London's Brent crude <LCOc1> was $2.42 lower at $134.02.
China is to raise retail fuel prices by 1,000 yuan ($145.50)
a tonne from Friday to help recoup losses in the face of record
crude prices, industry sources told Reuters.
"Back of the envelope calculation shows its about 47 cents a
gallon. It looks like it could definitely do something in the
medium term, before the Olympics, maybe not," said James
Crandell of Lehman Brothers Energy Research in New York.
Earlier, oil had rallied to over $137 after rebels from
Nigeria's oil producing Niger Delta warned oil and gas tankers
to avoid the region or risk being attacked.
The rebel Movemnet for the Emancipation of the Niger Delta
also said it might carry out further attacks on oil facilities
after gunmen caused the shutdown of production at the Bonga
field earlier on Thursday. []
Bongas pumps an average of around 220,000 barrels per day.
Nigeria is already producing about 20 percent below its
potential, contributing to the rally in oil prices to a record
high near $140 earlier in the week.
Its output has suffered from a violent campaign of sabotage
by militants in its southern Niger Delta, the heartland of its
oil industry.
News that Goldman Sachs has raised its oil price forecasts
further on continued supply tightness, had supported prices.
Oil would average $117 a barrel this year, compared with its
previous estimate of $108, and price would average $140 next
year, Goldman Sachs said.
Traders say the market is cautious ahead of the emergency
meeting this weekend between producers and consumers in Saudi
Arabia.
The White House said on Wednesday it was not expecting Saudi
Arabia to announce an output increase in Jeddah.
(Reporting by Chua Baizhen in Singapore and Ikuko Kao in
London; editing by James Jukwey)
