Oil climbs for fourth day as Iran tension mounts

TOKYO, Feb 26 (Reuters) Oil prices rose for a fourth day on Monday, nearing a fresh 2007 high above a barrel as world powers prepared to consider tightening U.N. sanctions against Iran, the world's fourth largest oil exporter.

U.S. crude was trading 32 cents higher at .46 a barrel by 0200 GMT, adding to a more than TOKYO, Feb 26 (Reuters) Oil prices rose for a fourth day on Monday, nearing a fresh 2007 high above $61 a barrel as world powers prepared to consider tightening U.N. sanctions against Iran, the world's fourth largest oil exporter.

U.S. crude was trading 32 cents higher at $61.46 a barrel by 0200 GMT, adding to a more than $2 a barrel rally built on an unexpectedly deep decline in U.S. fuel stocks and pipeline and refinery glitches, on top of the growing geopoliticial worry.

London's Brent crude was up 41 cents.

Friday's $61.80 peak was the highest price since Dec. 26, marking a complete recovery from the early-January slump that knocked oil to a 20-month low of $49.90 a barrel amid exceptionally warm U.S. weather and a lack of fund buying.

The rebound has been supported by gradually tightening fundamentals, and by the revival of concerns over a possible disruption of Iran's oil supplies after the latest U.N. deadline for Tehran to halt its nuclear programme came and went unheeded.

Officials from the U.N. Security Council plus Germany will meet in London later on Monday to consider possible further steps after limited sanctions were imposed on Tehran in December, although some analysts said further price gains may not follow.

''Iran is a key factor for oil prices recovering from just below $50. However, it is a psychological factor and many market players are sceptical at the same time,'' said Tetsu Emori, the chief strategist at Mitsui Bussan Futures.

''Iranian oil supplies weren't disrupted last year although this issue was discussed many times.'' The rhetoric hotted up at the weekend, with Iranian President Mahmoud Ahmadinejad saying its nuclear programme has ''no brake and no reverse gear''. U.S. Secretary of State Condoleeza Rice said it needed a ''stop button''.

U.S. Vice President Dick Cheney said that all options were on the table following Iran's refusal to heed a U.N. deadline for halting enrichment, while an Iranian deputy foreign minister vowed the country was prepared for any eventuality, even war.

The West suspects Iran is really trying to build an atomic arsenal and says the fact that it kept its nuclear programme secret for 18 years until 2002 and its lack of cooperation with U.N. inspectors show ill intent. Tehran denies the charge.

Other factors also aided oil's gains last week, including a sharp 3.1 million barrel fall in weekly U.S. gasoline inventories and unscheduled refinery and pipeline outages, both serving to stoke worries over motor fuel supplies this summer.

The energy complex has also benefitted from the latest flush of investor enthusiasm for the whole commodities sector, which has lifted corn, wheat and some metals prices, while technical traders bought after oil broke above $60 a barrel resistance.

REUTERS SBA RN0759 a barrel rally built on an unexpectedly deep decline in U.S. fuel stocks and pipeline and refinery glitches, on top of the growing geopoliticial worry.

London's Brent crude was up 41 cents.

Friday's .80 peak was the highest price since Dec. 26, marking a complete recovery from the early-January slump that knocked oil to a 20-month low of .90 a barrel amid exceptionally warm U.S. weather and a lack of fund buying.

The rebound has been supported by gradually tightening fundamentals, and by the revival of concerns over a possible disruption of Iran's oil supplies after the latest U.N. deadline for Tehran to halt its nuclear programme came and went unheeded.

Officials from the U.N. Security Council plus Germany will meet in London later on Monday to consider possible further steps after limited sanctions were imposed on Tehran in December, although some analysts said further price gains may not follow.

''Iran is a key factor for oil prices recovering from just below . However, it is a psychological factor and many market players are sceptical at the same time,'' said Tetsu Emori, the chief strategist at Mitsui Bussan Futures.

''Iranian oil supplies weren't disrupted last year although this issue was discussed many times.'' The rhetoric hotted up at the weekend, with Iranian President Mahmoud Ahmadinejad saying its nuclear programme has ''no brake and no reverse gear''. U.S. Secretary of State Condoleeza Rice said it needed a ''stop button''.

U.S. Vice President Dick Cheney said that all options were on the table following Iran's refusal to heed a U.N. deadline for halting enrichment, while an Iranian deputy foreign minister vowed the country was prepared for any eventuality, even war.

The West suspects Iran is really trying to build an atomic arsenal and says the fact that it kept its nuclear programme secret for 18 years until 2002 and its lack of cooperation with U.N. inspectors show ill intent. Tehran denies the charge.

Other factors also aided oil's gains last week, including a sharp 3.1 million barrel fall in weekly U.S. gasoline inventories and unscheduled refinery and pipeline outages, both serving to stoke worries over motor fuel supplies this summer.

The energy complex has also benefitted from the latest flush of investor enthusiasm for the whole commodities sector, which has lifted corn, wheat and some metals prices, while technical traders bought after oil broke above a barrel resistance.

REUTERS SBA RN0759