June 26, 2008 / 2:16 PM / 12 years ago

NYMEX crude bounces on supply worry, weak dollar

* Weakening dollar lifts crude futures

* OPEC chief sees $150-170 oil in coming months

* Oil markets eyeing Nigerian union/Chevron talks

NEW YORK, June 26 (Reuters) - U.S. oil futures surged Thursday on continuing supply concerns, a weak dollar and a report OPEC President Chakib Khelil said prices could rise as high as $170 per barrel in the coming months.

On the New York Mercantile Exchange at 10:06 a.m. EDT (1406 GMT), August crude CLQ8 was up $3.75 or 2.79 percent at $138.30 a barrel, trading from $133.68 to $138.95.

The NYMEX front-month record $139.89 was struck June 16, the same day the August contract reached its $140.42 peak.

Inventory data showing U.S. domestic crude supplies rose unexpectedly last week had sent crude futures lower on Wednesday.

In London, August Brent crude LCOQ8 rose $3.64 or 2.73 percent to $138 a barrel, trading $133.52 to $138.52.

Crude oil prices could rise to as high as $170 per barrel in the coming months but are unlikely to hit $200 and should ease toward the end of the year, OPEC President Chakib Khelil said in an interview on Thursday. [ID:nL26487730]

“I forecast prices probably between $150-170 during this summer. That will perhaps ease toward the end of the year,” he told France 24 television, according to a text of the interview released by the station.

There were reports that OPEC-member Libya has threatened to cut production, helping fuel the Thursday rally, traders said.

The dollar fell broadly Thursday, nearing a three-week low against the euro after the Federal Reserve held interest rates steady and dashed expectations of an imminent rate hike.

Nigerian senior oil workers union and Chevron Corp (CVX.N) are expected to resume talks Thursday in an effort to avert an all-out strike that could crimp more output. [nL26605180]

Chevron’s 350,000 barrel per day Nigerian output was reduced by a third last week when armed youths blew up one of its supply pipelines, a military source said.

Chevron declared a force majeure on its Escravos crude exports on Tuesday.

With NYMEX July products contracts set to expire next Monday. July RBOB RBN8 was up 9.59 cents or 2.83 percent at $3.49 per gallon, trading from $3.3860 to $3.5430.

July heating oil HON8 rose 11.64 cents or 3.1 percent to $3.8656 a gallon, trading from $3.74 to $3.9371.

The August/August heating oil crack spread <0#CL-HO=R> was at $25.24. The August/August RBOB crack spread <0#RB-CL=R> was at $8.90. (Reporting by Robert Gibbons; Editing by John Picinich)

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