* Oil steadies after near-$5 fall on China fuel price hike
* Shell shuts 220,000 bpd oil output in Nigeria
* Venezuela threatens to cut supply to Europe
(Updates prices, adds analyst quotes)
SINGAPORE, June 20 (Reuters) - Oil steadied on Friday,
after a nearly $5 plunge a day ago, on China's move to raise
fuel prices, as traders weighed the impact on demand in the
world's second-largest oil consumer.
U.S. July crude <CLc1>, which expires on Friday, rose 19
cents to $132.12 a barrel by 0632 GMT, after slipping earlier
in the day. London Brent <LCOc1> gained 26 cents to $132.26.
China unexpectedly raised retail gasoline and diesel prices
by up to 18 percent on Thursday, its first hike in eight
months, as the government bowed to the around $40 a barrel
increase in crude prices since the last hike in November.
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Some analysts said the move might bolster consumption by
encouraging healthier supply at the pumps, which had faced long
queues and rationing as refiners cut back on production to
limit hefty losses made by selling discounted fuel.
[]
"The initial reaction will be an angry population, but I
still think demand is fairly inelastic," said Gerard Rigby of
Fuel First Consulting in Sydney.
China's rapid demand growth was one of the catalysts for
oil's almost seven-fold surge from $20 six years ago to a
record high of nearly $140 a barrel this week.
While analysts debate the impact of Beijing's decision,
high fuel costs have already shown signs of denting demand in
other consumers, such as the United States and Britain.
Americans cut down on the number of miles they drove for
the sixth straight month in April, resulting in the biggest
six-month decline since the oil shock of the 1979-80 Iranian
revolution. []
"Traders don't want to be short going into the weekend.
There are just too many hotspots around the world now... There
is more potential for bullish news than bearish news," Rigby
said.
Goldman Sachs on Thursday raised its oil price forecast
further on expectations of continued supply tightness,
predicting Brent oil would average $117 a barrel this year, up
from its previous estimate of $108.
It forecast Brent crude prices would average $140 next
year.
NIGERIA ATTACKS
Traders will be eyeing Nigeria, where militants in
speedboats attacked Royal Dutch Shell's <RDSa.L> main
220,000-barrel-per-day Bongas offshore facility and cut oil
output at the world's eighth-largest oil producer by a tenth.
[]
Shell said it was too soon to say how long output at the
deepwater installation would be shut down.
OPEC member Nigeria is already producing about 20 percent
below its potential due to sabotage by militants in the
southern Niger Delta oil hub.
In Venezuela, President Hugo Chavez threatened to stop
selling oil to European countries if they applied a new ruling
that allows illegal immigrants to be detained for up to 18
months and face a re-entry ban of up to five years.
"Venezuelan oil will not go to the countries that apply
this shameful directive. I'll say it now, Venezuelan oil will
not go," Chavez said. []
The comment came after the country said it would not attend
the emergency meeting on Sunday in Saudi Arabia between
consumers and producers to discuss rising oil prices.
Saudi Arabia, the world's top exporter, is hiking output to
help bring down prices, which have jumped nearly 40 percent
this year and caused protests around the globe.
Venezuela insisted that supply was not to be blamed for
soaring crude prices.
(Reporting by Chua Baizhen, Editing by Clarence Fernandez)
