Oil prices rose more than $1 on Thursday, extending the previous session's gains as chronic global supply threats offset high inventory levels in the United States, the world's largest energy consumer.
Dealers said they were focusing on ongoing supply threats in Nigeria and Iran, along with worries that al Qaeda was targeting the global oil industry. US light crude for April delivery was up $1.43 at $63.40 a barrel while London's Brent crude gained $1.67 to $64.12 a barrel.
The strength added to modest gains made Wednesday after Nigerian militants vowed to continue their attacks on the Opec-nation's oil installations, having already forced shut one-fifth of its crude exports.
The militants released six out of nine oil worker hostages and said they had delayed their next attack to concentrate resources on "one huge crippling blow to the Nigerian oil industry."
"The Nigerian situation has the potential to get a lot worse. It's going to run and run," said Kevin Norrish of Barclays Capital.
In addition, there is no sign of a swift solution to a dispute between Iran, the world's fourth biggest exporter, and the West, which accuses Tehran of trying to make a nuclear bomb.
The International Atomic Energy Agency meets in Vienna on March 6 to consider a report on Iran, which is the next stage toward possible UN sanctions.
Oil analysts are concerned the dispute could lead Iran to suspend its exports in protest.
Adding to worries, al Qaeda has advised followers to attack pipelines in Saudi Arabia and Iraq, according to a 2-year-old document recently posted on the Web.
The group claimed a foiled attack last Friday on the world's largest oil processing plant at Abqaiq in Saudi Arabia and vowed further attacks.
Jordanian intelligence prevented an al Qaeda plot to mount a suicide attack against a key civilian target, state television said on Wednesday.
The Organisation of the Petroleum Exporting Countries, which has been producing oil near full throttle, will meet March 8 in Vienna to consider its output policy.
It is widely expected to leave production levels unchanged in view of current price strength.
Opec member Venezuela, a hard-line price hawk, said Thursday the cartel should consider a production cut of between 500,000 and 1 million barrels per day.
Opec's president, Nigerian Oil Minister Edmund Daukoru, said Wednesday it was too early to say what the group will decide. US Energy Secretary Sam Bodman said on Thursday that Daukoru offered him no promises in their meeting Wednesday that the cartel would keep pumping crude at current high levels.
"I didn't ask him for any commitments and he didn't ask me for any," Bodman told reporters.
The United States' crude inventories are running 9 percent over a year ago, while gasoline stockpiles are at their highest since 1999. But some analysts are concerned that robust US demand this spring, along with some specification changes in motor fuel, could lead to a crunch.
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