Oil rose nearly 1 per cent today, as escalating tensions between Israel and Iran stoked supply concerns and traders doubted Saudi Arabia's promise to pump more oil, if needed, would turn back the rally.
A vow by Nigerian militants to halt attacks on oil facilities in the delta barely tempered the rise after two fresh attacks over the past week knocked out another tranche of output.
US light crude for August delivery extended early gains to rise $1.10 or 0.81 per cent to $136.46 a barrel by 8.08am, reversing an early decline of more than $1. London Brent crude rose $1.14 or 0.85 per cent to $136.00.
Oil prices hit a record near $140 a barrel last week and have doubled from a year ago, stoking inflation and triggering protests worldwide, and top energy policy makers meeting in Jeddah at the weekend offered little hope for a quick fix.
Top exporter Saudi Arabia confirmed it will lift production for a second time to 9.7 million barrels per day (bpd) in July, its highest in more than 30 years, and pledged on Sunday to open the taps wider still if the market demanded it.
It also sketched out plans to boost capacity to 15 million bpd when the future demand warrants the investment, hoping to soothe growing fears that the world is running out of oil, but those measures failed to take the edge off an anxious market.