* Oil rises 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, previous SINGAPORE)
LONDON, June 20 (Reuters) - Oil rose towards $133 a barrel
on Friday after plunging nearly $5 in the previous session on
China's unexpected fuel price rise.
U.S. July crude <CLc1>, which expires on Friday, rose 69
cents to $132.62 a barrel by 0835 GMT, after slipping earlier in
the day. London Brent <LCOc1> was 74 cents up at $132.68.
China, the world's second-largest oil consumer, raised pump
gasoline and diesel prices by up to 18 percent on Thursday, its
first hike in eight months, as the government bowed to a nearly
$40 increase in crude prices since the last hike in November.
The market was still grappling with what kind of impact the
Chinese move would have.
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 markets could go back and forth on the Chinese
announcement for a while. On the one hand, while raising retail
prices could have the desired effect of cutting demand, it also
could boost supply, which has been running short in many parts
of the country," Edward Meir at MF Global said in a note.
"Ironically, in such a case, demand could move even higher,
as much of the country's pent-up needs would be met."
Demand from China, India and the Middle East has been cited
as a factor behind oil's almost sevenfold surge from $20 six
years ago to a record high of nearly $140 a barrel this week.
High fuel costs have already shown signs of denting demand
in other consumers, such as the United States and Britain.
"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," said
Gerard Rigby of Fuel First Consulting in Sydney.
One main hotspot is Nigeria, where militants in speedboats
attacked Royal Dutch Shell's <RDSa.L> 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.
The comment came as the country said it would not attend an
emergency meeting on Sunday in Saudi Arabia between consumers
and producers to discuss rising oil prices.
(Additional reporting by Chua Baizhen; Editing by James Jukwey)
