Oil rises above $136 after slump
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By Santosh MenonLONDON (Reuters) - Oil rose above $136 a barrel on Thursday, as investors resumed buying after its recent sharp drop and boosted by fresh cuts to Nigerian oil output.U.S. crude rose $1.70 to $136.30 a barrel at 10:50 a.m. EDT, recovering from lows of $133.02. It slid $4.14 on Wednesday, taking the drop from last Friday's all-time peak of $147.27 to more than $10.London Brent crude for September was $1.54 up at $137.35.Traders said oil had been boosted by a combination of short-covering after its recent sharp drop and as a fresh cut to Nigerian output on Thursday underscored the risk to supplies.An attack on an oil pipeline in Nigeria, the world's eighth-biggest oil exporter, shut 20,000 barrels per day of crude oil production.Italian oil company Eni said it had temporarily shut down production of 47,000 barrels of oil a day in Nigeria because of loss of pressure in pipelines.Oil had initially looked like continuing its recent tumble, falling by more than $1 on mounting evidence of fading demand in the United States and easing tensions between the U.S. and Iran.Dealers said Wednesday's losses were triggered by a 3-million barrel increase in U.S. crude stocks, according to data from the Energy Information Administration.Gasoline and distillate inventories also rose."Besides the increase in crude, gasoline, and distillate stocks, it's interesting to note that demand in the United States remains relatively weak as well," said David Moore, analyst at Commonwealth Bank of Australia.The widely-watched government report showed U.S. oil products demand running at 2.0 percent below year-ago levels, another sign that soaring prices are cutting into consumer demand for fuel.Adding to pressure on oil prices, a senior U.S. official said on Tuesday the United States planned to send an envoy for talks this weekend between Iran and major powers over Tehran's nuclear program.Washington had said it would not be involved in any pre-negotiations with Iran unless it gave up nuclear enrichment. The standoff between the Islamic Republic and the West has helped boost oil prices.(Additional reporting by Luke Pachymuthu in Singapore and Gene Ramos in New York; editing by James Jukwey) (c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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