Oil rose to $71 a barrel on Friday, near a nine-month high, as a strike in Nigeria threatened more of the country's output and Iran remained defiant over its nuclear programme.
Rising tension surrounding two of the world's leading oil producers have coincided with lower OPEC supply and relatively low gasoline stocks in top consumer the United States before the onset of peak summer demand.
"In Nigeria, there's still quite a lot of unknown possibilities and the strike seems to be continuing," said Tony Machacek, a broker at Bache Financial. "That will keep the market fairly well supported."
London crude now seen as more representative of global oil prices, climbed 36 cents to $71.08 a barrel by 1030 GMT. It hit a 9-month high of $71.80 on Thursday. U.S. crude rose 72 cents to $64.90.
Oil ticked higher after a Kyodo news agency report that North Korea fired several short-range missiles towards the Sea of Japan on Friday morning. The yen fell against the dollar and the euro.
On Thursday, Iran's President Mahmoud Ahmadinejad again dismissed Western pressure to halt Tehran's nuclear drive, saying the country's nuclear work was nearing a "peak."
U.S. President George W. Bush said Washington would work with European, Russian and Chinese leaders to impose a third, stronger round of U.N. Security Council sanctions against Iran.
In Nigeria, workers at the state oil company began an indefinite strike over welfare issues on Thursday and unions said they would target oil output if their demands are not addressed within days.
(Reuters, 25/05/2007)