Oil rises above $136 after slump

Oil rose above $136 a barrel on Thursday, as investors resumed buying after its recent sharp drop and boosted by fresh cuts to Nigerian oil output.
U.S. crude rose $1.70 to $136.30 a barrel at 1450 GMT, recovering from lows of $133.02. It slid $4.14 on Wednesday, taking the drop from last Friday's all-time peak of $147.27 to more than $10.
London Brent crude for September was $1.54 up at $137.35.
Traders said oil had been boosted by a combination of short-covering after its recent sharp drop and as a fresh cut to Nigerian output on Thursday underscored the risk to supplies.
An attack on an oil pipeline in Nigeria, the world's eighth-biggest oil exporter, shut 20,000 barrels per day of crude oil production.
Italian oil company Eni said it had temporarily shut down production of 47,000 barrels of oil a day in Nigeria because of loss of pressure in pipelines.
Oil had initially looked like continuing its recent tumble, falling by more than $1 on mounting evidence of fading demand in the United States and easing tensions between the U.S. and Iran.
Dealers said Wednesday's losses were triggered by a 3-million barrel increase in U.S. crude stocks, according to data from the Energy Information Administration.
Gasoline and distillate inventories also rose.
"Besides the increase in crude, gasoline, and distillate stocks, it's interesting to note that demand in the United States remains relatively weak as well," said David Moore, analyst at Commonwealth Bank of Australia.
The widely-watched government report showed U.S. oil products demand running at 2.0 percent below year-ago levels, another sign that soaring prices are cutting into consumer demand for fuel.
Adding to pressure on oil prices, a senior U.S. official said on Tuesday the United States planned to send an envoy for talks this weekend between Iran and major powers over Tehran's nuclear programme.
Washington had said it would not be involved in any pre-negotiations with Iran unless it gave up nuclear enrichment. The standoff between the Islamic Republic and the West has helped boost oil prices.