* Iranian military commander calls for oil boycott
* Israel's offensive in the Gaza Strip raises tensions
* U.S. looks to buy 12 million barrels for reserve
(Updates prices, recasts)
By David Sheppard
LONDON, Jan 5 (Reuters) - Oil jumped to a three week high on
Monday after an Iranian military commander called for an oil
boycott over Israel's offensive in the Gaza Strip, and as the
Russian gas export row stoked fears for European energy
supplies.
An OPEC source told Reuters that the Iranian call would not
sway other members of the Organization of the Petroleum
Exporting Countries.
A strong start to the new year for stock markets, mounting
evidence of OPEC's compliance with production cuts, and the U.S.
Energy Department's decision to start rebuilding its crude
reserves have also helped oil to a third day of gains.
Oil prices have risen by more than 25 percent since Israel
launched its Gaza offensive on Dec. 27 [].
U.S. crude for February delivery rose to an early high of
$48.68 a barrel on Monday -- the highest since December 15 --
before paring gains on profit-taking. The price was up $1.07 at
$47.41 a barrel at 1030 GMT.
London Brent was up $1.17 at $48.08.
"Sabre rattling by Iran and further instability in the
Middle East always produces fears for oil supplies, which is
putting a platform under prices," said Bank of Ireland analyst
Paul Harris.
The Gaza violence does not directly threaten any oil
supplies, but traders said there was underlying concern it could
affect other countries in the Middle East, the origin of a third
of the world's crude, with No. 4 oil producer and OPEC member
Iran typically the most vocal.
An Iranian military commander has called on Islamic
countries to cut oil exports to Israel's supporters in Europe
and the United States in response to the offensive in Gaza, the
official IRNA news agency reported on Sunday. []
However, core OPEC oil producers in the Gulf were likely to
ignore Iran's call, an OPEC source said on Monday. []
"There are no plans to do this and I think it is very
unlikely," the source told Reuters.
OPEC's most influential member Saudi Arabia and neighbours
Kuwait, the United Arab Emirates and Qatar are regional allies
to the United States.
RUSSIAN GAS
Adding to geopolitical concerns, Russian natural gas
supplies to southeast Europe have been reduced as a result of
Russia's stand-off with Ukraine over gas prices, which began on
New Year's day. The two sides blame each other for the dispute.
[]
European energy firms, which receive about a fifth of their
gas via pipelines through Ukraine, said they had enough gas
stockpiled to maintain supplies for several days, but analysts
said Europe could face problems if the row dragged on.
The row, which recalls a similar dispute three years ago
that also disrupted supplies, is likely to raise new questions
in Europe about Russia's reliability as a gas supplier.
The market will also be looking for further signs of OPEC
production cuts, after Libya and Abu Dhabi's National Oil Co
both joined leading producer Saudi Arabia, vowing to cut output
by January as OPEC trys to stem the $100 a barrel drop in oil
prices since July 2008.
Senior OPEC officials have suggested the producer group
could meet in mid-January or February to review the oil market's
performance after announcing steep production cuts last month,
although an OPEC source told Reuters on Monday that was
unlikely.
(Additional reporting by Jennifer Tan and Jonathan Leff in
Singapore; Editing by William Hardy)
