May 21, 2007 / 6:58 AM / 10 years ago

Oil roars past $70 on Nigeria concerns

<p>A worker walks near a nodding donkey in a file photo. Oil climbed towards $70 a barrel on Monday, supported by Iran pressing ahead with its atomic work and Nigeria's prolonged supply outages.Sergei Karpukhin</p>

NEW YORK (Reuters) - Oil surged more than a dollar to over $70 a barrel on Monday as unrest in Nigeria kept markets on edge for further supply disruptions ahead of the U.S. summer gasoline season.

London Brent LCOc1 settled up $1.07 to $70.49 after trading as high as $70.83 earlier. U.S. crude CLc1 gained $1.33 to $66.27 a barrel.

Unknown assailants broke into an unused Nigerian oil well operated by Total (TOTF.PA) on Monday, causing a minor spill, a company spokesman said. There were no injuries nor any impact on oil output. nL21558740

Rising violence in Nigeria since February 2006 has cut a third of the OPEC nation's oil output and forced thousands of expatriates to evacuate.

"The uncertainty over Nigeria oil production and the continuing worries over U.S. gasoline supply seem to be behind this latest rally on crude," said Phil Flynn, analyst at Alaron Trading in Chicago.

Ongoing refinery problems in the United States have drawn down gasoline stocks ahead of the peak summer gasoline demand season, propping up prices in recent weeks.

Despite the prolonged Nigerian outage, oil ministers from the Organization of the Petroleum Exporting Countries were satisfied that demand for crude oil was being met.

"The market is very well supplied, in fact it is oversupplied," OPEC President Mohammed al-Hamli, who is also oil minister for the United Arab Emirates, told Reuters on Monday.

OPEC is due to meet on September 11 to decide output policy.

Prices also drew support as Iran, the world's No. 4 oil exporter, pressed ahead with its atomic work.

A senior Iranian official said on Saturday the country has started building its first domestically made atomic power plant -- a move which could deepen Tehran's standoff with the West over its nuclear program.

The West fears Iran's atomic work is aimed at making weapons. Tehran says it only wants to produce electricity.

"In the next decade Iran will be one of the most talked-about countries in the world regarding domestic nuclear energy," Mohammad Saeedi of Iran's Atomic Energy Organisation was quoted as saying by the ISNA news agency nDAH936573.

Additional reporting by, Alex Lawler in London, Fayen Wong in Sydney

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