Posted by Reuters on
United States - * Oil rises to over $137 on end of Nigerian cease-fire
United States - * Oil rises to over $137 on end of Nigerian cease-fire
* Iran holds second day of missile tests
* Brazilian oil workers threaten strike
(Updates throughout, changes dateline from LONDON)
NEW YORK (Reuters) - Oil rose to over $137 a barrel Thursday on Nigeria and Brazil output threats and as additional missile tests by OPEC member Iran escalated tensions with the West.
Further support came from the weak dollar, which fell on renewed credit worries after capital concerns dragged down shares in major mortgage finance sources Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ).
U.S. crude rose $1.51 to $137.56 a barrel by 1311 EDT (1711 GMT). London Brent crude traded up $1.53 at $138.11 a barrel.
The Movement for the Emancipation of the Niger Delta (MEND), the main militant group in Nigeria's oil-producing Niger Delta, said it was abandoning a cease-fire in protest at a British offer to help tackle lawlessness in the region, raising concern of further disruptions to the OPEC nation's exporters.
"The cease-fire in Nigeria is ending on the (July) 12th and that's creating some jitters as far as supply is concerned," said Rob Kurzatkowski, futures analyst with optionsXpress.
Rebel attacks on oil infrastructure in the world's No. 8 exporter have helped push crude to record highs over $145 this month, adding to a 40 percent rise in prices this year.
Concerns that tensions between OPEC member Iran and the West over Tehran's nuclear program could lead to an oil supply disruption have added to bullish sentiment.
Iran tested more missiles in the Gulf on Thursday, state media said, and the United States reminded Tehran that it was ready to defend its allies.
Workers at Brazil's Petrobras threatened to launch a five-day strike for next week that would affect all 42 Campos basin offshore platforms, which account for more than 80 percent of Brazil's output of around 1.8 million barrels per day.
Further support came as the dollar slipped against other currencies. Investors have flocked to oil and other commodities this year as a hedge against rising inflation and the weak greenback.
High fuel costs have battered consumer economies this year, driving down demand and causing global fuel protests, after surging growth in demand from emerging economies like China sparked a 6-year rally in oil prices.
The International Energy (otcbb: IENI.OB - news - people ) Agency on Thursday forecast pressure on oil markets could ease next year as demand growth slows, cutting the need for OPEC crude.
"We do see the potential for a build in spare capacity in 2009, that should help to improve the situation," said Lawrence Eagles of the IEA, adding a pledge from OPEC kingpin Saudi Arabia to increase output this year could help provide more of a cushion for the market. (Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos in New York, Jane Merriman and Barbara Lewis in London and Felcia Loo in Singapore; Editing by Christian Wiessner)