Oil rose to $70 a barrel on Monday after Nigeria’s main militant group said it attacked a Royal Dutch Shell oil platform, outweighing a fairly bearish report from the International Energy Agency (IEA).

The Movement for the Emancipation of the Niger Delta (MEND) said its fighters struck the Shell Forcados platform in the Delta state at about 0230 GMT.

There was no immediate independent confirmation but Shell said it shut in some oil production at its western operations in the Delta while it investigated reports of attacks.

U.S. crude for August delivery rose to a high of $70.06 per barrel, up 90 cents, before slipping back slightly to $69.75 by 1230 GMT.

London Brent crude was up 60 cents at $69.52.

“The Nigerian supply disruptions brought in some buying,” said Christopher Bellew, broker at Bache Commodities in London.

On Friday, four militant Nigerian factions said they would accept in principle an amnesty offer from President Umaru Yar’Adua, raising hopes

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Oil rose towards $41 a barrel on Tuesday, lifted by expectations that the approval of an $800 billion-plus stimulus package by the U.S. government would boost demand for oil in the world’s largest energy consumer.

However, uncertainty about the timing and detail of the plans kept investors on edge, capping oil’s gains.

U.S. light crude for March delivery rose $1.36 to $40.92 a barrel by 1301 GMT. The contract settled down 61 cents at $39.56 a barrel on Monday.

London Brent crude gained $1.67 cents to $47.69 a barrel, maintaining its premium against U.S. prices.

“I think the market is expecting the U.S. stimulus package to go through, which should be bullish for oil prices but it’s anyone’s guess at the moment,” said Tony Machacek, at Bache Commodities.

U.S. Treasury Secretary Timothy Geithner was also due to unveil a plan

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Russian gas deal, Gaza ceasefire ease supply concerns… World oil demand expected to fall in 2009… U.S. holiday leads to low trading volumes…

Oil fell more than $2 towards $34 a barrel on Monday after Russia and Ukraine signed a 10-year gas deal clearing the way for the resumption of supplies to a freezing Europe.

Implementation of a ceasefire between Israel and Hamas in Gaza also eased supply concerns as the market remained under pressure from expectations that the weakening global economy would erode oil demand.

“Right now the economy is dominating,” said Harry Tchilinguirian, analyst at BNP Paribas. “The market is very volatile and the signs are that demand is weakening.”

U.S. crude oil futures for February delivery dipped to a low of $33.89, down $2.62, before recovering to trade at $34.53 by 1800 GMT.

Traders said the February U.S. crude oil futures

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In energy news Monday, oil prices continued their decline. Crude for February delivery dropped $2.45 to $39.91 a barrel, while January reformulated gasoline lost 8.6% to finish at $0.89 a gallon.

Oil’s decline came amid more reports of decreasing demand for crude. China’s General Administration of Customs announced Monday that November crude imports to the world’s second-largest consumer of oil had dropped 1.9% from a year ago. The Japanese Ministry of Finance likewise released numbers showing that November crude imports had declined by 17% since last year.

These figures outweighed news that OPEC might institute further cuts in production. According to the Associated Press, OPEC president Chakib Khelil announced that he was willing to cut production “as much as was necessary to stabilize oil prices.” This announcement comes just a week after OPEC announced a cut of 2.2 million barrels a day.

The extent to which oil prices could continue to drop

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In the energy market Friday, oil prices went haywire, with crude for January delivery closing at $33.87/barrel, down $2.35 on its last day as front-month contract, while crude for February delivery closed at $42.36/barrel, up 69 cents. January reformulated gasoline gained 5 cents, to $0.97/gallon.

Such a wide gap between near month contracts is unusual.

But, “The last standing bulls are rolling over” to buy the February contract while “dumping their January oil on the market,” said Phil Flynn, of Alaron Trading.

Meanwhile, OPEC President Chakib Khelil said that the cartel could continue to slash its output, beyond the 2.2 million barrel/day cut already agreed to.

“We will continue this reduction until the price will stabilize,” Khelil said, while adding that, “We feel very strongly that what happened in 2008 and what’s happening now is due in great part to the speculation.”

And Saudi Arabian Oil Minister Ali Naimi reiterated that $75 a

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U.S. light crude for January delivery fell $2.64 to $33.58 a barrel by 6:50 a.m. EST. The new four year low was made on the heels of a record production cut by the OPEC on Wednesday, but even that was not enough to alleviate fears that the weakening global economy will keep crude and crude-related products under pressure for months to come.

Technical traders who use long-term price movements to forecast where crude futures will settle believe the next support for oil is around $35 a barrel. Dean Hazelcorn, a trader with Coquest Inc. in Dallas, said refiners’ profit margins are starting to improve, which could also encourage buying of oil for near-term delivery, boosting the front-month futures price.

When OPEC President Chakib Khelil was asked today if he believed oil prices had found a floor around current levels, he replied, “I don’t believe there is any reason for it to fall

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OPEC agreed today to reduce production by 2.2 million barrels a day, the largest cut ever done by OPEC, they are doing everything to prevent oil prices from falling.  How low can oil prices go, more importantly, which stocks to play? Greed.  Oil.  Money.  They all go hand in hand. “We want non-OPEC countries to contribute, and ...

OPEC in agreement on need for deep supply cut… Saudi Arabia has cut supply by 8 percent - OPEC president… Russia offers OPEC “concrete support”

Oil topped $50 a barrel on Monday, boosted partly by expectations OPEC will agree on a deep supply cut this week to try to prop up prices.

A weaker dollar also lent support to oil, which has fallen about $100 from a record high of more than $147 in July, as the global financial crisis has hit demand for fuel.

Goldman Sachs has predicted oil could go as low as $30.

U.S. light crude for January delivery rose to as high as $50.50, topping the $50 line for the first time since early December. It was trading $3.00 up at $49.28 by 1421 GMT.

It has rebounded by more than 20 percent from a 4-year low of

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I'm appearing on Fox Business TV at 1:00 to 1:06 today on the Stuart Varney Show. Stuart's a good guy, so probably no chairs will be flung (ha-ha). Anyway, I'm going on to talk about oil prices.brbrIf you don't get Fox Business -- I don't get it on my darned cable -- here are the talking points I'm bringing for my interview ...brbrGoldman Sachs predicts oil prices will fall to $30 a barrel.brbrOPEC President Chakib Khelil said all the group’s members support an oil output cut at this week’s meeting, including the largest producer Saudi Arabia.brbrOPEC is about 75% compliant with the last round of production cuts (cutting production by 1.5 million barrels a day from Nov. 1) – that’s pretty good by their standards.brbrRussia, a non-OPEC producer, will likely cut production as well. OPEC is asking Russia to reduce oil output by 200,000 to 300,000 barrels a daybrbrWe are ...

Some commodities are due a strong rebound, says Manraaj Singh. The underlying fundamentals are largely unchanged from July, when many resources were posting record highs. Manraaj says crude oil prices could double by the end of 2009, while agricultural prices will also soar.

This from Fleet Street Invest:

Just a few months ago it seemed like the whole investment world was jumping onto the commodities bandwagon. Now it seems that they can’t jump off fast enough.

The benchmark Reuters/Jefferies Commodity Index has now fallen by 51% from its peak in July (see chart below).

But as I’ll explain in a moment, commodity prices are set for a rebound. And if you are willing to take a longer term view, this is a once-in-a-lifetime opportunity.

Commodity prices reflect future expectations about the global economy. Less business activity and infrastructure spending means less demand for commodities.

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