Oil hovers near $133 a barrel

Crude prices hold steady amid supply concerns, worries about U.S. economy.

BANGKOK, Thailand (AP) -- Oil held steady near $133 a barrel Tuesday in Asia on worries about global petroleum supplies and the outlook for the U.S. dollar and economy.

Reports of an attack by militants on an oil pipeline in Nigeria, one of Africa's largest oil exporters, also supposed prices.

Midday in Singapore, light, sweet crude for July delivery was up 99 cents from Friday at $133.18 a barrel in electronic trade on the New York Mercantile Exchange.

Nymex floor trading was closed Monday for Memorial Day in the U.S., and electronic trading levels were little changed from the day before during Asian hours. Monday was also a bank holiday in Britain, and trading volumes were lower than usual.

In London, July Brent crude futures were up 63 cents at $133 a barrel on the ICE Futures exchange.

Memorial Day holiday official kicks off the American summer driving season, and analysts are expecting the seasonal demand for diesel and gasoline to provide additional support for prices.

The dollar has been slipping over the last week after a modest recovery, and investors will be watching economic data out of the United States to be released over the next few days for further clues about the health of the world's biggest economy.

Reports are expected this week on U.S. consumer confidence, new home sales, gross domestic product and other key economic data. If the reports show the economy's weak trend is continuing or deepening, that would push the dollar lower, which would in turn boost oil prices.

Oil and other hard commodities are seen as hedges against a weakening greenback and inflation. Also, a weak dollar, the currency of international oil trade, makes petroleum products less expensive to Asian and European buyers.

The dollar, one of the factors that has fed oil's rally from about $65 a year ago, was slightly lower against the yen and weaker against the euro in midday Asian currency trading in Tokyo.

Prices were also supported by Monday's news of the latest in a spate of oil-pipeline bombings in Nigeria. The country's main militant group, the Movement for the Emancipation of the Niger Delta, said the sabotage of a pipeline-switching station marked the anniversary in office of President Umaru Yar'Adua, who took power May 29, 2007, with a promise to calm the oil region.

The local joint venture of Royal Dutch Shell PLC confirmed there had been a pipeline attack and said "some production" had been shut down to allow crews to contain the crude spilling from the ruptured conduit.

Last week, a series of supply warnings shook markets, and Thursday, a report that the International Energy Agency - the energy watchdog for the most industrialized nations -- is in the process of lowering its forecast for long-term global oil supply, sent crude futures rocketing to an all-time high of $135.09 a barrel.

Investors are also worried about a growing squeeze on global diesel supplies as demand in China surges has sparked a massive run up in heating oil prices.

Over the weekend, China's top economic planning agency again urged oil and power companies to make sure there are enough supplies for earthquake-hit areas and for the Beijing Olympic Games in August.

In other Nymex trading, heating oil futures rose 7.23 cents to $3.9379 a gallon while gasoline prices rose 1.63 cents to $3.4123 a gallon. Natural gas futures rose 17.4 cents to $12.031 per 1,000 cubic feet. 

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