* Nigerian rebels say blow up Shell wellhead in Niger Delta
* Dollar drops on Fed reassurance on interest rates
* Optimism over easing global recession buoys equity markets
(Updates throughout, changes dateline, previous SINGAPORE)
By Christopher Johnson
LONDON, June 26 (Reuters) - Oil rose to $71 a barrel on
Friday after Nigerian rebels said they blew up a wellhead in a
Royal Dutch Shell <RDSa.L> oilfield in the Delta state and as
equity markets rallied on optimism the recession was easing.
The rise in oil followed a 2 percent gain on Thursday and
put it on course for a 7 percent gain this week, buoyed by
prospects for an economic recovery that has lifted prices from
below $40 over the past four months.
The release of the June consumer sentiment index by the
Reuters/University of Michigan Surveys of Consumers later on
Friday was expected to reflect a mildly improving outlook for
the U.S. economy, auguring well for ailing world energy demand.
Although U.S. jobless claims last week rose, first-quarter
gross domestic product shrank slightly less than estimated,
suggesting the downturn may be easing. []
By 0737 GMT, the benchmark August U.S. crude oil contract
<CLc1> was up 70 cents per barrel at $70.93, having hit a high
of $71.23, up $1. London Brent <LCOc1> rose 67 cents to $70.45.
"Worry over the geopolitical situation is a big factor right
now, and that's what's giving the market traction," said Peter
McGuire, managing director of Commodity Warrants Australia.
Nigeria's Movement for the Emancipation of the Niger Delta
(MEND) said it attacked the wellhead in the Afremo oilfield
because the military had gone on a "punitive expedition" in
Delta state shortly after President Umaru Yar'Adua announced an
amnesty offer for rebels. []
INTENSITY
The military denied carrying out any such campaign.
Independent confirmation of the details of the attack was not
immediately available. Shell has said it is checking its
operations for damage from Sunday's attacks.
Afremo was one of the sites MEND also said it had attacked
in a triple raid on Sunday. It described the field as being 14
miles from an export terminal through which crude oil from
Shell's Forcados fields is pumped.
Pipeline bombings, attacks on oil and gas installations and
the kidnapping of industry workers over the past three years
have prevented Nigeria from pumping much above two thirds of its
installed oil output capacity of 3 million barrels per day.
The intensity of recent attacks in Nigeria have taken the
oil market by surprise and tightened West African oil supplies.
Iranian tension has also supported oil. About 20 people have
died in protests after Iran's June 12 presidential election, the
worst unrest since the 1979 Islamic revolution. []
Fuelling oil's rise, Exxon Mobil <XOM.N> said its huge
Baytown refinery suffered an operational glitch that triggered
flaring, sparking worries the largest U.S. oil refinery could
tighten gasoline stockpiles during this summer's peak demand
driving season. []
Firmer Asian stocks on the back of Wall Street's rally also
lent support, with shares outside Japan <.MIAPJ0000PUS> climbing
1.4 percent and Japan's Nikkei <> up 0.8 percent. []
European shares advanced in early trade [].
A further boost came from a fall in the dollar against most
major currencies on Friday as investors shifted funds back into
risky assets after the Federal Reserve this week appeared to
confirm it would keep interest rates low for a while. []
The Reuters/University of Michigan final June consumer
sentiment index, due at 1355 GMT, is expected to show a reading
of 69.0 compared with 68.7 in the May report, a Reuters poll of
economists showed.
(Additional reporting by Jennifer Tan; editing by Sue Thomas)
