UPDATE 5-Oil hits record over $120 on dollar, Nigeria, Iran

                                
 (Updates prices, quotes, dollar action)
                                
 NEW YORK, May 5 (Reuters) - Oil jumped more than $3 to
strike a record over $120 a barrel on Monday on the weaker
dollar and supply concerns from OPEC members Nigeria and Iran.
                                
 U.S. crude <CLc1> gained $3.37 to trade at $119.69 at 11:55
a.m. EDT (1555 GMT), after surging to $120.21 earlier. London
Brent crude <LCOc1> rose $3.33 to $117.89 in light trade due to
a bank holiday in Britain.
                                
 "People are piling back up on crude oil due to the weakness
of the dollar and production issues in Nigeria," said Phil
Flynn, analyst at Alaron Trading in Chicago.
                                
 "But it also looks like momentum play, after Friday's
positive reaction to the unemployment report."
                                
 U.S. government data released Friday that showed U.S.
payrolls fell by 20,000 jobs in March, a quarter of the losses
expected, helping to counter concerns that the weaker U.S.
economy could drag down oil demand. [ID:nN02551119]
                                
 The dollar fell broadly on Monday, however, as forex
investors decided the world's biggest economy was still
struggling. A Monday report from the Institute for Supply
Management that showed the U.S. service sector grew
unexpectedly in April. [nWEN5453]
                                
 Further support for oil came from Iran's announcement on
Monday it would not consider any incentives offered by world
powers that would constrain its right to nuclear technology.
[ID:nHAF530338]
                                
 The comments come just three days after major powers said
they would make a new offer to convince the Islamic republic to
halt its nuclear plans, a process which the West believes
Tehran wants to master so that it can build nuclear weapons.
                                
 Iran's standoff with the West over its nuclear program
added geopolitical concerns and fundamental tightness last year
that sent crude to new highs.
                                
 Crude has continued to surge since then, extending a
six-year rally that has sent prices up five-fold to near $120 a
barrel last month on a wave of investment by speculators
seeking to hedge against inflation and the weak dollar.
                                
 Additional supply worries came from Nigeria, where Royal
Dutch Shell <RDSa.L> was forced to shut more of its production
after militants on Saturday attacked a flowstation in the
oil-rich Niger Delta. [ID:nL03347126]
                                
 Renewed clashes between Turkey and Kurdish rebels in
northern Iraq also lent support to oil prices.
                                
 The Turkish army said on Saturday it killed more than 150
Kurdish PKK fighters in air strikes in northern Iraq last week,
but the rebel group denied this and security forces in the
region also expressed scepticism. [ID:nL03716742]
                                
 Crude oil speculators on the New York Mercantile Exchange
cut net long positions last week, according to data from the
Commodity Futures Trading Commission released on Friday.
                                
 Net crude long positions fell to 53,311 in the week to
April 29, down from 70,562 in the week to April 22
[ID:nN02571868].
 (Reporting by Matthew Robinson in New York, Janet McGurty in
London, Fayen Wong in Perth; Editing by Marguerita Choy)