* Oil rises on fighting between Georgia and Russia
* Some oil shipments suspended from Caspian producers
* Repair at BTC pipeline may take 1-2 weeks or longer
(Updates prices, adds comment)
By Alastair Sharp
LONDON, Aug 11 (Reuters) - Oil edged above $116 on Monday,
after fighting between Russia and Georgia disrupted exports from
the Caspian region, helping to stem a steep selloff on the crude
market.
U.S. light crude for September delivery <CLc1> was up $1 at
$116.21 a barrel by 11061 GMT, off highs of $116.90. London
Brent crude <LCOc1> rose 90 cents to $114.23.
Oil had fallen more than $5 on Friday, when it largely
ignored the outbreak of hostilities in the Caucasus region, a
key transit route for oil and gas from the Caspian, to focus on
concerns about global economic growth.
"Even with what is a serious situation in Georgia, with
pipelines threatened perhaps, we haven't had much of a bounce
back," said Simon Wardell, an analyst at Global Insight.
"All it seems to have done is halted the speed of the fall."
Oil has shed about $31, or 21 percent, from its peak of over
$147.27 struck on July 11 on concerns of a slowdown in demand.
Analysts said oil's gain was also tempered by the rising
U.S. dollar, which vaulted to a six-month high against a basket
of currencies on Monday [].
Georgia's oil ports of Supsa and Batumi, used to export
Azeri crude oil, are operating only partially, while the
Georgian port of Poti is not operating, a shipping agent said on
Monday. []
Kazakhstan also stopped shipments of its crude from
Georgia's Batumi port. Both Azerbaijan and Kazakhstan also use
crude pipelines for export.
A major oil pipeline exporting Azeri crude passes through
Georgia but was disabled last week on Turkish territory before
the conflict erupted.
A fire in eastern Turkey on the Baku-Tblisi-Ceyhan (BTC)
pipeline halted loadings of Azeri Light crude shipped to the
Turkish port of Ceyhan.
The blaze was extinguished on Monday and repairs may take
one to two weeks or longer, a source at the pipeline consortium
said. []
BP <BP.L> has also cut output by at least 400,000 barrels a
day at the Azeri-Chirag Gunashli oilfields because of the fire.
[]
Russian warships have been dispatched to Georgia's Black Sea
coast, but Russia has denied targeting oil pipelines.
Analysts said investors were refocusing on supply and demand
fundamentals, with OPEC's next move and U.S. inventory levels
eyed in the months ahead.
"(U.S.) inventories are indicating that the market is a
little bit tighter than people think, and that it isn't a
one-way bet," said Michael Lewis, global head of commodities
research at Deutsche Bank.
"The forward curve is quite a good barometer of fundamentals
in the market, obviously barring these geopolitical events," he
said.
The crude forward curve has been in contango -- when prices
are higher further out -- for most of the last two years, but
briefly dipped into backwardation last week.
OPEC President Chakib Khelil, speaking on a visit to Iran,
urged members of the oil exporters' group to stick to agreed
targets on output. []
OPEC is overshooting its informal output target, with Saudi
Arabia leading the way after the kingdom pledged to meet rising
demand and help tame runaway oil prices. OPEC meets on Sep. 9.
(Additional reporting by Santosh Menon in London, Fayen Wong in
Perth; Editing by William Hardy)
