Oil surges on supply worries and economic data

By Matthew Robinson

NEW YORK (Reuters) - Oil surged more than 2 percent to top $95 a barrel on Thursday, spurred by supply concerns and strong economic data from giant consumers the United States and Japan.

The rise added to gains earlier in the week that came amid an escalating legal battle between Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) and Venezuela over the nationalization of a giant heavy oil project last year.

U.S. crude settled up $2.19 at $95.46 a barrel after reaching $95.60 in earlier activity, the highest level since January 10. Brent crude gained $1.77 to $95.09 a barrel.

Venezuela, one of the largest crude exporters to the United States, cut off crude shipments to Exxon after the U.S. oil major won court orders to freeze over $12 billion in the OPEC nation's assets.

Energy Secretary Sam Bodman said on Thursday he did not expect Exxon Mobil to have trouble replacing Venezuelan oil, but added the nation's Strategic Petroleum Reserve would be available if needed.

"My general understanding is we don't expect there to be a big problem but we stand ready to make it (strategic reserve) available if it is required," he told Reuters in Orlando, Florida.

The Exxon embargo came after Venezuelan President Hugo Chavez, a critic of President George W. Bush, threatened to cut off all shipments to Venezuela's main customer over the legal challenge, adding to a string of supply worries in the Atlantic Basin.

"A number of supply-driven factors have reminded the market of how thin spare capacity of production really is -- Nigeria, North Sea glitches and geopolitical tension," said Harry Tchilinguirian of BNP Paribas.