(Recasts to include wider commodities rally, updates prices)
By Santosh Menon
LONDON, Jan 14 (Reuters) - Oil rose to nearly $94 a barrel
on Monday, halting a three-day losing streak amid a wider
commodities rally, as the dollar's weakness and tensions
involving Iran countered worries of a global economic downturn.
U.S. light crude for February delivery <CLc1> rose $1.04 to
$93.73 a barrel by 1315 GMT, off lows of $92.41 earlier in the
session. London Brent crude <LCOc1> was $1.15 higher at $92.22 a
barrel.
Oil, which hit a record high of $100.09 on Jan. 3, has since
mostly fallen on growing fears of a possible economic recession
in the United States, which could curb demand in the world's
biggest oil consumer.
Oil's reversal came on a day of rising prices across
commodities. Gold and platinum surged to record highs, silver
touched a 27-year peak and copper prices also rallied, partly
helped by the dollar's slide to seven-week lows against the yen
and the euro.
"Geopolitical tensions between Iran and the United States as
well as violence in Nigeria have rekindled worries of a
potential supply disruption," said Gerard Burg, a resource
analyst at National Bank of Australia (NAB) in Melbourne.
"That will put upward pressure on prices," he said.
U.S. President George W. Bush accused Iran on Sunday of
threatening global security by backing militants and urged his
Gulf Arab allies to confront the issue [].
The verbal exchanges between Washington and Tehran have
rekindled worries that Iran, the world's fourth-largest crude
exporter, could cut oil exports to retaliate against U.S.
pressure over its nuclear programme.
In Nigeria, militants fighting for regional control of the
country's oil-producing south detonated a remote-controlled bomb
on an oil tanker on Friday, causing a big fire.
GEOPOLITICS
It was the second rebel attack on Africa's largest oil
industry in a week. Militant raids since 2006 have knocked out a
fifth of the country's oil output capacity.
Analysts said the oil market was caught between the opposing
influences of short-term tight supply and downside risks to oil
demand from a slowing economy, with geopolitical events and
speculators driving prices in the near-term.
"The market is still finding its view on what's going to
happen over the course of the year," said Simon Wardell, analyst
at Global Insight.
The run-up to the OPEC meeting on Feb. 1 is expected to be
closely watched for direction, analysts said.
The Organization of the Petroleum Exporting Countries said
on Sunday a slowing global economy would not affect oil demand
in the short term and lead to a price collapse. [].
In a newspaper interview, OPEC secretary-general Abdullah
al-Badri also said oil prices had been driven to record highs by
speculators rather than by any supply shortage, and that the
producer group was ready to boost output if needed.
Crude speculators on the New York Mercantile Exchange
boosted net long positions to a two-month high in the week to
Jan. 8, as oil prices struck a record $100 a barrel.
(Additional reporting by Fayen Wong in Sydney; editing by James
Jukwey)
