SINGAPORE (Reuters) - Oil climbed further on Tuesday as a militant threat to Nigerian oil exports and Iran's standoff with the West over its nuclear ambitions kept the market worried about supply disruptions.
London Brent crude (LCOH6) for March was up 27 cents to $63.45 a barrel by 0329 GMT, after rising 58 cents on Monday.
U.S. light crude for February (CLc1) jumped 86 cents to $64.78 in catch-up gains after being closed for a national holiday on Monday. U.S. crude earlier touched $64.95 a barrel, its highest since October 4.
Crude flows from Nigeria, the world's eighth-largest oil exporter, are being threatened by violence in its oil-rich delta region, while Iran remains a longer-term concern.
``Nigeria's escalating problems though are boosting prices too. Nigeria puts almost 2.5 million barrels of crude into the market daily -- around 3 percent of global oil output,'' said analyst Tobin Gorey of the Commonwealth Bank of Australia.
A militant group believed to be behind a spate of attacks, the Movement for the Emancipation of the Niger Delta, said in an email to Reuters it vowed to totally destroy the country's capacity to export oil.
Royal Dutch Shell (RDSa.L), its biggest foreign operator, is considering withdrawing more staff, a senior industry source told Reuters on Monday, after heavily armed militants killed six people in a raid on a Shell platform on Sunday.
Shell issued a statement saying it had no intention to pull out of the Niger Delta but made no mention of plans for staffing fields in the western delta swamps.
Kidnapped oil workers listed the militant group's demands as local control of the Niger Delta's wealth, payment of $1.5 billion by Shell to the state government for pollution and the release of ethnic leaders.
Crude prices in New York have risen more than 6 percent since the start of the year on geopolitical concerns and strong investor fund buying.
The market was also watching Iran as European powers on Monday began drafting a resolution to have OPEC's second-largest producer referred to the U.N. Security Council next month over its contentious nuclear program.
Blanket sanctions such as an oil embargo are deemed highly unlikely, but the OPEC giant has said any crackdown could drive up world oil prices and has not ruled out using oil for leverage.
If Iran uses its oil exports as a retaliatory political weapon and ceases exports of around 2.4 million barrels per day (bpd), the rest of the world's spare capacity would struggle to cover the deficit, especially with supply disruption in Nigeria.
Iran's OPEC governor repeated his country's call for the oil cartel to cut production by 1 million bpd when it meets at the end of this month, as it fears rising stocks during seasonally weaker second quarter demand.
``A sharp fall in oil prices prior to OPEC's end-January meeting is looking increasingly unlikely, and the pressure on OPEC to make a cut to output prior to Q2 is abating,'' said Barclays Capital.