London oil rises above , eyeing Nigeria vote

LONDON, Apr 20 (Reuters) Oil rose above a barrel on Friday, supported by concern that weekend elections in Nigeria increased the risk of threats to supply from the world's eighth largest exporter.

Nigeria holds a presidential election on Saturday amid concern over its validity as a democratic poll and the possible impact on oil supplies of an unclear outcome or violence.

''We are concerned going into this weekend with the Nigerian elections,'' said Kevin Blemkin, a broker at Man Financial. ''With that sort of tension out there, we think the market's going to hold steady.'' London Brent crude

U.S. crude has lost some of its usefulness as an indicator of how much oil should cost around the world because unusually large inventories at the delivery hub of Cushing, Oklahoma, have pressured the price there.

''Geopolitical tension in Nigeria ahead of elections could be supportive,'' said Makoto Takeda, assistant manager at Bansei Securities in Tokyo.

Oil traders said that Brent's move above a barrel had prompted some investors to buy based on technical analysis, using past price moves to predict future direction.

The dispute over Iran's nuclear work may also keep traders cautious even after diplomats said its production of nuclear fuel was only a test-scale operation, and was not producing meaningful amounts.

While traders eyed the risk of threats to Nigerian supply, developments there this week pressured prices.

Nigeria said it aimed to restart by end-May the 380,000 barrels per day Forcados oilfields, shut by violence since early 2006. About 3.8 million barrels is scheduled for export in June, according to trade sources.

Besides the prospect of a restart at Forcados, U.S. fuel inventory data showing a 2 percentage point increase in refinery processing rates last week helped assuage worries over summer fuel supplies.

''There are easing concerns about the supply shortage in the U.S. gasoline market,'' said Takeda.

Also pressuring prices, Enbridge Inc. on Wednesday restarted part of a major pipeline carrying Canadian crude to U.S.

refineries that had been shut by a leak three days earlier.

REUTERS SR HS1624