* Nigeria militants say blow up two oil, gas pipelines
* Sunoco ups output elsewhere after Marcus Hook refinery fire
* Dollar weakens; European, U.S. stock markets rise
(Updates prices)
By Alex Lawler
LONDON, May 18 (Reuters) - Oil rose almost 3 percent towards
$58 a barrel on Monday as a fire at a Sunoco Inc U.S. refinery
and violence in Africa's top oil exporter Nigeria revived
concern about supplies.
Sunoco <SUN.N> said output at its 178,000 barrel per day
(bpd) Marcus Hook refinery was "impacted." Nigeria's main
militant group said it would blockade waterways in the Niger
Delta to try to prevent crude exports.
"The Nigerian stories probably would not have much of an
impact on their own, but combined with the refinery glitches are
contributing to a positive start to the week," said Tony
Machacek, a broker at Bache Commodities.
"We also have the dollar weakening and stock markets look
stable enough, so there is some financial market impact."
U.S. crude for June <CLc1> rose $1.63 to $57.97 by 1353 GMT.
It fell $2.28 to settle at $56.34 on Friday, down from a
six-month high above $60 hit earlier last week. Brent crude for
July <LCOc1> rose $1.89 to $57.87.
Sunoco will boost production at its Philadelphia and New
Jersey refineries to make up for output lost at the Marcus Hook
plant due to Sunday's explosion and fire in an ethylene unit,
the firm said on Monday. []
U.S. gasoline futures were up 3 percent at $1.7310 a gallon.
In other refinery news, Citgo Petroleum Corp said on Sunday
operations at its 167,000 bpd Lemont, Illinois, refinery were
unaffected by a Sunday morning fire in a conveyor belt.
RISK PREMIUM
Oil has risen from a near five-year low of $32.40 reached in
December as the market has tracked a rally in equities
underpinned by hopes of an economic recovery.
European stocks [] rose and U.S. equities got off to to a
stronger start, helping oil's gains. The dollar weakened,
boosting the appeal of oil to some investors. []
While concern in the oil market about real or threatened
supply disruptions has waned in recent months as the economic
crisis has eroded global demand, analysts were keeping an eye on
the Nigerian violence.
"We are maintaining a Nigerian risk premium for the week and
our feeling is that the market in general has not priced in
enough of such a premium," said Olivier Jakob of Petromatrix.
Nigerian security forces launched an offensive against
militant camps around Warri in the western Niger Delta on Friday
after two oil vessels were hijacked and its soldiers were
attacked, leading to the heaviest fighting in at least eight
months. []
Besides firmer equities, supply curbs by OPEC have also
bolstered prices. The group, which has agreed to cut 4.2 million
barrels per day (bpd) of output since September, meets on May 28
to decide production policy.
So far, comments from ministers from the Organization of the
Petroleum Exporting Countries suggest the group is unlikely to
reduce supply further. But prices are still lower than some in
the group would like.
Iranian President Mahmoud Ahmadinejad said on Monday OPEC's
second largest oil exporter considered an oil price of $80 to
$90 barrel as "suitable", the semi-official Mehr news agency
reported. []
Crude oil speculators on the New York Mercantile Exchange
shifted to a small net long position in the week to May 12,
according to data released on Friday. Long positions are bets
prices will rise.
The June U.S. crude contract expires on Tuesday and dealers
said trading may be more volatile than usual as a result.
(Reporting by Alex Lawler and Fayen Wong in Perth; Editing by
Keiron Henderson)
