* Saudi sees no OPEC change, warns on investment
* Nigeria pipeline attack shuts in 100,000 bpd
(Adds trader, analyst comment, updates prices)
By Jane Merriman
LONDON, May 26 (Reuters) - Oil fell below $60 a barrel on
Tuesday, pressured partly by a firmer U.S. dollar and
expectations an OPEC meeting later this week would keep the
producer group's output unchanged.
U.S. oil prices for July delivery <CLc1> fell $1.91 from
Friday's close to $59.76 a barrel by 1000 GMT.
London Brent crude was down $1.31 at $58.90.
There was no settlement price for U.S. crude oil on Monday
as NYMEX was closed for the U.S. Memorial Day holiday.
Oil has nearly doubled in price since December, buoyed
partly by expectations of higher prices if the world economy
recovers. U.S. crude has reached its highest in six months.
"Clearly, more fund money is now banking on higher oil
prices down the road," Edward Meir of broker MF Global said in a
research note.
But he said the supply/demand outlook for oil was less
promising in the near term.
"Particularly in the light of the likely OPEC decision to
leave quotas unchanged. This leaves unaddressed the continuing
build up in oil inventories, which could come back to haunt the
cartel."
OPEC's most influential member Saudi Arabia said the group
was likely to leave its output targets unchanged.
The al-Hayat newspaper quoted Saudi Oil Minister Ali
al-Naimi as saying world stocks were still too high to consider
lifting output. []
The Organization of the Petroleum Exporting Countries, which
has already pledged to curb output by 4.2 million barrels per
day since September, will meet in Vienna on Thursday to review
its supply policy.
(For more on OPEC please double click on [])
PRICE SPIKE WARNING
Saudi Arabia also warned oil prices could spike up to the
$150 record peak reached in 2008 within three years as it joined
other energy leaders in calling for more investment to boost oil
output over the long term.
(For more on the G8 Energy Summit please double click on
[])
Data from the U.S. Commodity Futures Trading Commission
showed a big increase in net long positions by "speculators" in
crude oil in the week to May 19. []
"Last week there was quite a big increase in the length held
by speculators in U.S. crude, but maybe when U.S. crude fell
back below $60 a barrel there was some stop-loss selling," said
Christopher Bellew of Bache Commodities Ltd.
A firmer U.S. dollar also weighed on the market. [] A
stronger dollar puts downward pressure on oil prices as it makes
oil more expensive for holders of other currencies.
Militant action in Nigeria has again become a supportive
factor for prices.
Nigerian militants launched a major strike against the oil
industry late on Sunday, bombing a Chevron pipeline and shutting
100,000 bpd of output. []
"Not yet enough to dramatically change a supply balance
where there is an estimated 100 million barrels of crude oil
sitting afloat, but with the military said to be expanding its
operations we will maintain a premium for the Nigerian
disruption risk," said Olivier Jakob of energy consultancy
Petromatrix in a research note.
North Korea's latest nuclear tests added to market tensions
and caused Asian and European shares to fall. []
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
