* Oil rises after near-$5 fall on China fuel price hike
* Iran says OPEC members unlikley to agree on output change
* Shell shuts 220,000 bpd oil output in Nigeria
(Adds comment, updates prices)
By Santosh Menon
LONDON, June 20 (Reuters) - Oil rose more than $1 to above
$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 $1.68
to $133.61 a barrel by 1050 GMT, after slipping earlier in the
day. London Brent <LCOc1> was $2.04 up at $134.04.
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 it 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. []
"We do not think that a country where consumers are used to
waiting 3 hours for automotive fuel in many cases, will see
significant negative demand elasticity from a simple
20 percent price increase," said Citi analyst James Neale.
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.
HOTSPOTS
"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 such 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 potential due to
sabotage by militants in the Niger Delta oil hub.
Meanwhile, Saudi Arabia said it would do all it could to
stabilise global oil markets ahead of a meeting between
consumers and producers on Sunday to discuss oil prices.
"Saudi Arabia looks ... with great interest to oil price
stability in the global market that will protect the interests
of producers and consumers equally and world economic growth,"
the Saudi Press Agency reported. []
Saudi, the world's top oil exporter, aims to boost output
next month to tame prices, but other OPEC members do not think
raising output is the solution to cool prices.
Iran said on Friday it was unlikely that OPEC members would
reach an agreement on crude output change at the weekend
meeting. Venezuela does not plan to attend the Sunday meeting.
(Additional reporting by Chua Baizhen; Editing by James Jukwey)
