* Iran tensions, fears of Nigeria strike support prices
* Kuwait to pump more next year
* Market awaiting U.S. inventory data, Fed decision
NEW YORK, June 24 (Reuters) - Oil rose to $137 a barrel on
Tuesday on concerns over Nigerian supply disruptions and rising
tensions between Israel and OPEC member Iran.
U.S. crude <CLc1> settled up 26 cents at $137.00 a barrel
after trading as high as $138.75. London Brent crude <LCOc1>
gained 55 cents to settle at $136.46 a barrel.
Oil prices rose early on rumors of an attack on Iran's
nuclear sites amid rising tensions with Israel over Tehran's
nuclear program. A senior Iranian official later denied any
attack had occurred and an Israeli army spokesman said they
were not aware of any incident, helping calm financial markets
and eroding oil's early gains. []
Analysts are worried heightened tensions between Iran and
the West could threaten 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.
Further support came from the weaker dollar and concerns
about supplies from Nigeria.
"The dollar weakness gave us a push this morning," said Tom
Bentz of BNP Paribas Commodity Futures Inc. in New York.
"The market is concerned about the missing Nigerian crude
supply and obviously the tensions between Iran and Israel."
Investors have rushed into crude and other commodities this
year as a hedge against the falling greenback and inflation,
helping to push oil to a record near $140 a barrel last week.
Markets are eyeing the dollar ahead of the U.S. Federal
Reserve's interest rate decision on Wednesday. Fed policy
makers are expected to leave rates unchanged.
Nigeria's senior oil workers union began a limited strike
at Chevron offices on Monday. The stoppage has not hit
production, but has added to concerns about further
disruptions in the OPEC nation, where militant attacks shut
340,000 barrels per day (bpd) of production last week.
[]
Royal Dutch Shell <RDSa.L> on Tuesday said it had restarted
production at its 220,000 bpd Bonga offshore oilfield in
Nigeria after an attack by militants last week. []
United Nations official Ibrahim Gambari will seek a 90-day
truce with militants that have attacked oil facilities in the
oil-producing Niger Delta. []
The disruptions have added to bullish sentiment that has
boosted prices 40 percent this year, extending a six-year rally
in oil as production struggles to keep up with surging demand
from emerging economies like China.
Oil cartel OPEC insists supplies are ample and blames the
rise on speculators. Still, top exporter Saudi Arabia announced
over the weekend at a meeting between producers and consumers
it would hike output in an attempt to cool markets.
Kuwait, another one of the few OPEC members with spare
capacity, plans to increase its oil output by 300,000 barrels
per day starting mid-2009, state news agency KUNA reported.
Rising fuel costs have hurt the economies of consuming
nations and sparked protests around the globe.
The market also is awaiting U.S. weekly oil inventory data
due on Wednesday. A Reuters poll of analysts forecast a 1.4
million barrel draw in crude inventories, a 200,000 barrel
build in gasoline stocks, and a 1.9 million barrel rise in
distillates. []
(Reporting by Matthew Robinson, Robert Gibbons, Gene Ramos in
New York, Jane Merriman in London; Editing by David Gregorio)
