* Israel-Iran tension, Nigerian output loss weighs on prices
* Saudi says ready to boost output, raise capacity
* OPEC President says sees no demand for more oil
By Santosh Menon
(Updates prices, adds analyst)
LONDON, June 23 (Reuters) - Oil rose more than $1 on Monday
as escalating tensions between Israel and Iran stoked supply
concerns and as Saudi Arabia's promise to pump more oil if
needed failed to win over a sceptical market.
A ceasefire by rebels halting attacks on facilities in the
Niger delta barely tempered the rise after two new attacks over
the past week knocked out another tranche of Nigerian output.
U.S. light crude for August delivery <CLc1> rose 95 cents to
$136.31 a barrel by 1040 GMT, reversing an early decline of more
than $1. London Brent crude <LCOc1> was $1.06 up at $135.92.
"The market took the opportunity to take profits earlier on
Saudi Arabia's promise... but realistically that alone is not
enough to calm the market," said Mark Pervan, senior commodities
analyst at Australia and New Zealand (ANZ) Bank in Melbourne.
Oil prices hit a record near $140 a barrel last week and
have doubled from a year ago, stoking inflation and triggering
protests worldwide. A meeting of top energy policy makers in
Jeddah at the weekend offered little hope for a quick fix.
Top exporter Saudi Arabia confirmed it will lift production
for a second time to 9.7 million barrels per day (bpd) in July,
its highest in more than 30 years, and pledged on Sunday to pump
even more if the market demanded it. []
It detailed plans to boost capacity to 15 million bpd when
future demand warrants the investment, in a bid to soothe
growing fears that the world is running out of oil, but those
measures failed to allay fears in an anxious market.
"With the immediate benefit of higher Saudi production
seemingly already lost, and with limited visibility on capacity
expansion plans, there seems to be little here to cool prices,"
Citi analysts said in a note.
Analysts said the short-term supply situation was still very
tight, putting tensions between Iran and Israel back in focus.
Iran said it would give a "devastating" response to any
attack on the country, the latest in an ongoing war of words
centred on Tehran's nuclear programme.
The New York Times quoted U.S. officials last week as saying
Israel had carried out a large military exercise, in an apparent
rehearsal for a potential bombing of Iran's nuclear facilities.
Energy experts are concerned any conflict in Iran could lead
to a shutdown of the Strait of Hormuz, a narrow waterway
separating Iran from the Arabian Peninsula through which roughly
40 percent of the world's traded oil is shipped.
JEDDAH OVERSHADOWED
Sunday's emergency meeting in Jeddah infused new urgency to
the ongoing dialogue of major producers and consumers,
participants said, but acknowledged a lack of hard measures for
taming oil's rally could leave the market underwhelmed.
"The meeting was a bit disappointing," said a European
diplomat. "The only producer that came up with any concrete
proposals was Saudi Arabia -- all the other producers just made
bland statements about future capacity plans."
OPEC President Chakib Khelil said on Monday oil producers
could not pump more without demand for extra supply, and at the
moment that demand did not exist.
In the end, Jeddah was overshadowed by news from Nigeria,
where militants in the southern Niger Delta announced a
unilateral ceasefire on Sunday, the end of a week that saw two
new attacks knock an additional 340,000 bpd offline.
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
