SINGAPORE, Jan 30 (Reuters) - Oil prices climbed more than
half a dollar to above $68 a barrel on Monday, shrugging off a
likely rollover in OPEC production to focus on key talks over
Iran's nuclear programme and more attacks in Nigeria.
U.S. light crude climbed 51 cents to $68.27 a barrel after
soaring $1.50 a barrel on Friday. Prices are up more than $7
this year and touched $69.20 a barrel a week ago, the highest
since Hurricane Katrina hit the U.S. Gulf Coast last summer.
London Brent crude climbed 47 cents to $66.71.
OPEC's meeting in Vienna on Tuesday is being overshadowed
this week by talks on Iran, with the United States and European
Union powers gathering later on Monday to try to convince
Russia and China to back tough diplomatic action to prevent
Tehran from continuing with its nuclear activity.
On Thursday, the U.N.'s International Atomic Energy Agency
will hold an emergency session at which the board could decide
to send Iran to the U.N. Security Council, a move traders fear
could prompt Tehran to consider using its oil as a political
weapon.
"The market has the same buy factors -- Iran and Nigeria --
and now increasing tension ahead of the IAEA meeting could
drive the market higher," said Naohiro Niimura, vice president
of the derivatives unit at Mizuho Corporate Bank in Tokyo.
Concerns over supplies from the world's fourth-largest
exporter, as well as lost output from Nigeria, have added fuel
to a market ignited by a new flood of fund money into the
commodities complex, which has performed strongly for two
years.
Last week's robust U.S. inventory levels, a pledge from
Saudi Arabia to fill supply gaps and the promise of an
emergency release from Western government stockpiles if Iran or
Nigeria halted exports failed to reverse the rally.
Although OPEC producers remain concerned over the seasonal
dip in second quarter demand, most agree the Organization of
the Petroleum Exporting Countries has little choice but to keep
output steady at near a 25-year high when it meets on Tuesday.
"I think we should leave things as they are," Algerian
Energy and Mining Minister Chakib Khelil told reporters in
Vienna on Sunday. "We will look again in March."
Saudi Oil Minister Ali al-Naimi went a step further, saying
he saw no reason to cut production at any time this year.
OPEC is scheduled to meet again on March 8, also in Vienna.
In Nigeria, where major producer Royal Dutch Shell has
already shut in over 200,000 barrels per day (bpd), around 20
armed men stormed and robbed a South Korean oil services firm,
the latest attack on a foreign oil company.
Disruptions to Russia's natural gas supplies to Europe and
some of its former Soviet neighbours has also unsettled traders
and lifted oil demand. Exports to Georgia began flowing again
on Sunday, a week after pipeline explosions cut supplies, while
supplies to Italy improved over the weekend.