Aug. 19 (Bloomberg) -- Crude oil rose for a second day in New York as production cuts in Ecuador and Nigeria heightened concern about supplies before a year-end peak in demand.

Output at Ecuador's state oil company, PetroEcuador, was slashed to 10,000 barrels a day yesterday from 200,000 a day because of protests, the company said. Oil prices have dropped 3.9 percent this week and may fall again next week, according to a Bloomberg survey, as record gasoline prices reduce consumption.

``Any supply disruption isn't good news because we expect to go into a tight market in the fourth quarter,'' said Anette Einarsen, an oil analyst at Nordea Bank AB in Oslo. ``In the background, we are starting to see changes in consumer behavior because of high oil prices.''

Crude oil for September delivery rose as much as $1.08, or 1.7 percent, to $64.35 a barrel on the New York Mercantile Exchange, where it was up 97 cents at 11:19 a.m. London time. Oil reached a record $67.10 a week ago, more than doubling from the end of 2003.

The average retail price for regular gasoline in the U.S. yesterday climbed to a record $2.60 a gallon, the AAA said on its Web site.

The protests in Ecuador shut about 200 oil wells, PetroEcuador said, and it will take at least six weeks to return to normal, the company said. The country was the 10th largest supplier of crude to the U.S. last year, according to the U.S. Energy Department, shipping an average 232,000 barrels a day, more than Russia and Norway.

Output Disruptions

Oil demand is forecast to increase to a record 85.9 million barrels a day in the fourth quarter, according to the International Energy Agency. The Organization of Petroleum Exporting Countries is pumping almost as much as it can to boost inventories, leaving little surplus capacity to compensate for disruptions to supply.

In Nigeria, Royal Dutch Shell Plc said yesterday production of about 14,200 barrels a day was cut for a third day after community groups surrounded some facilities.

Oil & Natural Gas Corp., India's biggest oil explorer, may by the end of August restore 70 percent of the 110,000 barrels a day it produced at a platform that sank into the Arabian Sea after it was destroyed. Full output may not be reached until June 2006, the company said.

BP Plc shut supplies from the Schiehallion field west of the U.K.'s Shetland Islands on July 29 after a fire. The restoration date for the oil field, which produces 120,000 barrels a day, was later than earlier expected.

Refining Capacity

``I do believe the bullish factors outweigh the bearish factors,'' said Rob Laughlin, a senior broker at Man Financial in London. ``We had a major shake-out this week, but there's still a shortage in refining capacity,'' so traders are buying contracts before the weekend.

Brent crude for October settlement added 91 cents, or 1.5 percent, to $63.31 on London's International Petroleum Exchange after reaching a record $66.85 at the beginning of the week.

Merrill Lynch & Co. and Goldman Sachs Group Inc., the second- and third-largest U.S. securities firms, both raised their long term oil-price forecasts this week. Goldman Sachs said prices will average $68 a barrel in 2006 from an earlier forecast of $55. Cosimo Damiano, an oil and gas equity analyst at Merrill, raised his 2006 forecast to $56 from $50.

Wal-Mart Stores Inc., the world's largest retailer, this week reported the smallest quarterly profit gain in four years and reduced its full-year forecast, blaming gasoline prices.

Thirty-three of 69 analysts and strategists surveyed, or 48 percent, said oil will decline next week. Twenty, or 29 percent, said prices will rise and 16 forecast little change.

``The economy can handle high prices better than in the 1970s because the price surge is demand-driven and we are more energy efficient. Still, oil demand may damp further,'' Nordea's Einarsen said.

Oil prices surged in 1974 after the Arab oil embargo the previous year. The Iranian revolution of 1979 and the country's war against Iraq in the 1980s sent the cost of a barrel for U.S. refiners to $35.24 in 1981, according to the Energy Department. That's about $75 in today's dollars.

To contact the reporter on this story: Alejandro Barbajosa in London at abarbajosa@bloomberg.net

Last Updated: August 19, 2005 06:25 EDT