* Oil up on Oct. futures expiry, U.S. rescue plan
* Saudi Arabia trims oil supply to majors
* Nigerian rebels declare unilateral cease-fire
* U.S. oil sector recovering from Ike
(Updates prices with U.S. settlement)
By Joe Brock
LONDON, Sept 22 (Reuters) - Oil prices soared more than 15
percent on Monday -- the biggest one-day gain on record --
continuing a rally sparked by the expiry of the front-month
futures contract and the United States' rescue plan for its
financial sector.
U.S. crude for October delivery <CLc1>, which expires
Monday, settled up $16.37, or 15.7 percent, at $120.92 per
barrel. The contract for delivery in November, which was much
more actively trade, was up only $6.62 at $109.37.
London Brent crude <LCOc1> traded up $5.84 at $105.45.
"Short squeeze, crude expiration -- that's it in a nutshell.
The dollar did drop further today, but you'll note that the
October-November crude spread blew way, way out," Tom Knight of
Truman Arnold in Texas said.
Sweeping government measures to rescue the financial system
and restore confidence in shaky markets spurred gains across
markets on Friday, when oil rose almost 7 percent to cap its
biggest three-day rally in a decade.
Oil had tumbled from record highs above $147 a barrel in
mid-July, weighed down by growing evidence that high energy
costs and economic woes were undercutting global fuel demand.
"The key driver continues to be the U.S. rescue package,
which has changed the sentiment in the oil market," said Bank
of Ireland analyst Paul Harris.
The slow recovery of the U.S. oil sector after Hurricane
Ike also supported prices, after causing the biggest disruption
to the nation's energy supplies since 2005.
Nearly 80 percent of oil production in the U.S. Gulf of
Mexico, home to a quarter of all U.S. oil output, remained shut
along with seven refineries. []
Oil prices were also supported by news China increased
crude imports 11.54 percent in August from a year earlier,
recovering from a steep July fall, the General Administration
of Customs said on Friday, confirming earlier data.
[]
"The Chinese import news is a sign of recovery, and a good
indication that oil prices could get back up again," said
Christopher Bellew of Bache Financial.
Industry sources also said on Monday that top oil exporter
Saudi Arabia has trimmed oil supplies to major international
oil companies and U.S. refiners since the start of September.
[]
However, gains were capped by news that Nigeria's main
militant group had begun a unilateral cease-fire on Sunday,
after a week of clashes with the military and attacks on oil
installations that cut output in Africa's top producer.
[]
(Reporting by Joe Brock, Matthew Robinson, David Sheppard in
London; Fayen Wong in Perth; Richard Valdmanis in New York;
Editing by Walter Bagley)
