* Saudi sees slight "uptick" in fuel demand
* Nigeria pipeline attack shuts in 100,000 bpd
(Adds Saudi comments, updates prices)
By Jane Merriman
LONDON, May 26 (Reuters) - Oil fell below $61 a barrel on
Tuesday but climbed from session lows after Saudi Arabia said
oil demand was picking up.
U.S. crude oil for July delivery <CLc1> was down $1.28 from
Friday's close at $60.39 a barrel by 1147 GMT. It earlier
touched a session low of $59.53.
London Brent crude was down 66 cents from Monday's close, at
$59.55 <LCOc1>.
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 increased demand if the world economy
recovers. U.S. crude has reached its highest in six months.
Saudi Arabian Oil Minister Ali al-Naimi said there was
already a slight "uptick" in fuel consumption.
Naimi, speaking to journalists ahead of Thursday's OPEC
meeting in Vienna, also said he hoped oil prices would hit $75 a
barrel between the third and fourth quarters of this year.
[] []
The al-Hayat newspaper has quoted Naimi as saying world
stocks were still too high for OPEC to consider lifting output.
[]
The Organization of the Petroleum Exporting Countries has
already pledged to curb output by 4.2 million barrels per day
since September. It meets to review supply on May 28.
(For more on OPEC please double click on [])
Saudi Arabia has 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
[])
SPECULATORS
"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."
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 become a supportive factor.
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
Anthony Barker)
