Oil rises near $70, supported by Iran, Nigeria

By Peg Mackey

LONDON (Reuters) - Oil climbed towards $70 a barrel on Monday, supported by Iran pressing ahead with its atomic work and Nigeria's prolonged supply outages.

London Brent crude (LCOc1: Quote, Profile, Research, currently more representative of the global market than U.S. oil, rose 35 cents to $69.77 by 0908 GMT, gaining some ground lost after profit-taking knocked 85 cents off prices on Friday. Worries over U.S. gasoline supplies had pushed prices beyond $70 a barrel on Thursday.

U.S. crude (CLc1: Quote, Profile, Research was up 26 cents at $65.20.

"The market would continue to look out for developments in Iran and Nigeria, which would offer some support to prices," said David Moore, an analyst at Commonwealth Bank of Australia.

A senior Iranian official said on Saturday the country has started building its first domestically made atomic power plant -- a move which could deepen a standoff over Iran's nuclear programme, which the West fears is aimed at making weapons.

Tehran says it only wants to produce electricity.

"In the next decade Iran will be one of the most talked-about countries in the world regarding domestic nuclear energy," Mohammad Saeedi of Iran's Atomic Energy Organization was quoted as saying by the ISNA news agency (nDAH936573: Quote, Profile, Research.

Further abductions in Nigeria over the weekend have dampened hopes of getting shut-in Nigerian oil -- valued for its gasoline content -- back to world markets.

Two Indian employees of a petrochemical firm were kidnapped by gunmen in the oil heartland of Port Harcourt, police said on Sunday. The militants had initially taken 10 workers from the residence but soldiers rescued some of them.

Violence has surged in Africa's top oil producer since February 2006, cutting a third of Nigeria's output and forcing thousands of expatriates to evacuate the volatile region.

Despite the prolonged Nigerian outage, ministers from the Organization of the Petroleum Exporting Countries were satisfied that demand for crude oil was being met.

"I am confident there is no shortage of supply," said Qatari Oil Minister Abdullah al-Attiyah on Monday. "The price is related to geopolitics. I don't think we will need to meet before September as there is no shortage."

OPEC is due to meet on September 11 to chart output policy.

(Additional reporting by Fayen Wong in Sydney)