Oil steady after five-day drop; investors eye metals

SYDNEY, May 7 (Reuters) Oil held steady on Monday after a week-long retreat after rising U.S. crude stocks alleviated fears of a shortfall in the world's top energy consumer and some commodity investors shifted their focus to metal markets.

Brent crude for June delivery reversed earlier losses to stand 3 cents higher at .34 a barrel by 0748 GMT, halting last week's nearly 5 percent decline after dealers took heart in rising crude supplies and a rebound in refinery throughput.

U.S. crude for June delivery was up 3 cents at .96 a barrel after a 2 percent slide on Friday.

The market has shrugged off news of well-below-average U.S.

gasoline stocks and continued violence against Nigeria's oil industry, possibly because investors are looking elsewhere.

''When prices went down in the past we saw some investors come into the market to buy on the dips, but we haven't seen it,'' said Tetsu Emori, chief strategist at Mitsui Bussan Futures Ltd.

''People don't want to take huge long positions in the crude market... Other (commodity) markets are looking much brighter.'' Tokyo platinum futures hit a record high on Monday, while copper in New York touched fresh contract highs on Friday.

Speculators on the New York Mercantile Exchange (NYMEX) slightly raised their net long positions in crude oil contracts in the week ended May 1, regulatory data showed on Friday, although it remained shy of the eight-month high in mid-April.

NIGERIA WORRIES The latest episode of kidnap in Nigeria, the world's eighth-largest oil exporter, could revive fears of further supply disruptions and potentially pose an upside risk to prices.

Gunmen on Saturday kidnapped a Belarussian woman working with Compass Group, bringing the total number of abductions in Africa's top oil producer to 28 in five days.

Another 65,000 barrels per day (bpd) were shut off by two attacks on Tuesday and Thursday, in addition to the 600,000 bpd, or one-fifth of the total capacity, which have been shut in since February last year due to militant attacks.

Concerns about Nigerian supply had eased last week after Royal Dutch Shell said the Forcados oil export terminal might resume operations in June, more than a year after it was shut by militant attacks.

Shell declined to give a precise date for when production would be restored fully.

But industry sources are doubtful that Shell will achieve its June target, as restoring lost output will take several months and may be set back by more violence.

Tensions in Iran appear to be seeing a respite as the country's foreign minister welcomed a Swiss proposal for continued talks on Tehran's disputed nuclear programme, which the West suspects is aimed at making atom bombs, Iranian media said on Saturday.

The paper did not give details of Foreign Minister Manouchehr Mottaki's views on the Swiss proposal, which includes a staged plan leading to a simultaneous suspension of Iran's uranium enrichment work and of U.N. sanctions REUTERS SR DS1429