Oil rises above $115 on technical rebound

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Perth, August 25:: Oil rose by more than $1 to top $115 a barrel on Monday, despite a rising US dollar, as traders saw buying opportunities after prices fell over $6 in the previous session.

Analysts said Russia's withdrawal of the bulk of its troops from Georgia on Friday was also bearish for the market, but tensions between the United States and Russia, the world's second-biggest oil producer, would continue to lend support to prices until Moscow withdraws its troops completely.

US light crude for October delivery rose 40 cents to $114.99 a barrel by 0817 GMT, after rising as much as $1.08 to $115.67.

The contract fell $6.59, or 5.4 per cent, to settle at $114.59 a barrel on Friday -- the biggest one-day fall in percentage terms since Dec. 27, 2004.

London Brent crude rose 58 cents to $114.50 on Monday.

Oil has fallen about 22 per cent since its peak of above $147 struck mid-July on concerns high energy costs are taking a toll on global fuel demand.

"I think prices rose because of a technical rebound. Some market participants are obviously seeing buying opportunities after Friday's sharp fall," said Mark Pervan, a senior commodities analyst at the Australian & New Zealand (ANZ) bank in Sydney.

Russia, which began to pull out the bulk of its forces from Georgia last week, said on Saturday its troops would patrol one of Georgia's main Black Sea ports, defying Western demands for a complete pullback to positions held before fighting broke out over a Georgian rebel region.

The easing of Tropical Storm Fay, which poured rain along the US Gulf Coast on Sunday local time, also diminished concerns the storm might disrupt oil and natural gas production at the Gulf of Mexico production areas.

Energy companies, including Chevron Corp, ExxonMobil Corp, BP Plc, ConocoPhillips and Royal Dutch Shell said they were keeping track of the storm but their operations were not affected.

The US dollar rose to a two-year high against sterling on Monday after data last week showed Britain's economy was stalling, prompting expectations of an interest rate cut by the Bank of England.

Oil's sharp fall on Friday was prompted by a strengthening US dollar and reports that showed an uptick in OPEC crude oil output and an expected decline in US travel over the Sept. 1 Labor Day holiday weekend.