(Releads with Nigeria, updates prices)
By Alex Lawler
LONDON, Feb 28 (Reuters) - Oil rose to $100 a barrel on
Thursday, reversing an earlier drop, after traders said supply
was cut in Nigeria, Africa's top exporter, due to a militant
attack.
Output at Nigeria's Brass River crude oil stream had been
cut by between 50,000 barrels per day and 80,000 bpd, traders
said, but added that Brass River oil loadings were not affected.
Italian oil firm ENI, operator of Brass River, had no immediate
comment.
U.S. crude <CLc1> rose 46 cents to $100.10 a barrel by 1225
GMT, having hit a record high of $102.08 on Wednesday. London
Brent crude <LCOc1> gained 55 cents to $98.82.
The setback at Brass River comes on top of about 515,000 bpd
of supply shut-in Nigeria largely because of militant attacks
and sabotage.
Earlier, prices fell as bulging stockpiles in the United
States added to concern over its slowing economy. U.S. crude
stocks rose last week for a seventh week, a government report
showed on Wednesday.
"In terms of fundamentals, it's hard to justify the ferocity
of the market's rally," said Robert Laughlin of MF Global. "The
weakness in the U.S. economy is now affecting demand."
Expectations that the Organization of the Petroleum Exporting
Countries will not raise production at its meeting on March 5
limited oil's decline, as did winter fuel demand in the United
States and Europe.
OPEC's president, Chakib Khelil of Algeria, said on Tuesday
members would not raise output, in part because of concern about
a demand slowdown.
Oil remained within a few dollars of the inflation-adjusted
peak of $102.53 reached in 1980 and was supported by the weak
U.S. dollar, which was trading near an all-time low against the
euro <EUR=>.
Analysts who use past price movements to predict future
direction said a move a few dollars higher for U.S. crude, also
known as WTI, could lead to further gains.
"With the dollar in freefall, we would be concerned that if
WTI rallies above $102-$103 it would trigger a further surge
towards $110-$115," Barclays Capital technical analysts said in
a report.
"For the time being, we are hopeful that $102-$103 will
continue to cap and dip back towards $99, or even $97, before a
more important test of the upside occurs."
Investors have pumped cash into commodities in recent weeks,
seeking a hedge against inflation and betting on signs the U.S.
Federal Reserve will keep cutting rates to prop up the economy.
Some other commodities also took a breather on Thursday.
Platinum, which hit a record high last week, fell more than 2
percent and copper slipped from a 21-month high.
(Reporting by Alex Lawler and Felicia Loo, editing by James
Jukwey)
