* Nigeria attacks cut output by more than 500,000 bpd
* Cushing weekly drawdown totals 1 mln bbls -traders
* Fed chair Yellen says see gradual U.S. rate hikes
(New throughout, updates prices and market activity following
prices after Fed chair's remarks)
By Barani Krishnan
NEW YORK, June 6 (Reuters) - Oil prices rose on Monday as
Nigeria's oil industry reeled from crippling attacks and traders
cited data pointing to fresh draws in U.S. stockpiles, but crude
futures pared gains after remarks from Federal Reserve Chair
Janet Yellen fed expectations that U.S. interest rates could
rise this year.
Global oil benchmark Brent initially hit seven-month highs
on worries about plummeting Nigerian production.
Output of Nigeria's Bonny Light crude has fallen by an
estimated 170,000 barrels per day (bpd) following recent attacks
on pipeline infrastructure, industry sources said. Total crude
production has fallen more than 500,000 bpd in a country that
was once Africa's biggest oil producer.
Oil retraced gains as the dollar popped up briefly after
U.S. Fed Chair Janet Yellen said she still expects gradual
interest increases this year despite disappointing U.S. jobs
growth in May.
The dollar's gains did not last, but oil traders remained
wary because any near-term gains by the greenback would make it
costlier for those holding other currencies to buy
dollar-denominated crude. The dollar rose briefly after Yellen
spoke, but could rally in coming days if speculation on a rate
hike grows, traders said. USD/
Brent crude futures LCOc1 were up 68 cents, or 1.3
percent, at $50.32 a barrel by 1:22 p.m. EDT (1722 GMT). Earlier
in the session, it hit $50.83, its highest since November.
U.S. crude futures CLc1 rose 80 cents, or 1.6 percent, to
$49.42, after an intraday high at $49.90.
Other developments limiting oil's advance included Total's
reopening of three of its five French refineries after strikes,
quicker-than-expected supply builds by Iran and the second
weekly rise in the U.S. oil rig count since the start of
2016.
Market intelligence firm Genscape reported a drop of just
over 1 million barrels in inventory at the Cushing, Oklahoma
delivery point for U.S. crude futures during the week to June 3,
traders who saw the data said.
Supply outages from Nigeria, Canada, Libya and Venezuela,
have forced U.S. refiners to draw more from domestic crude
stockpiles lately.
"At this point, there is no sign that the Nigeria
(situation) is getting any better, and it's looking worse," said
Scott Shelton, energy broker with ICAP (LON:IAP) in Durham, North
Carolina.
Any spare U.S. refining capacity arising from optimum
refinery runs during the summer might not be enough to balance
the market without deeper stock drawdowns that would support
crude prices more, he said.
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MAP-International tankers help export Iranian oil: http://tmsnrt.rs/25GuGal
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