Dec. 26 (Bloomberg) -- Crude oil rose for a third day in New York on concern shipments from Iraq may be disrupted after the Turkish military attacked bases of Kurdish rebels in northern Iraq.

Turkish jets bombed eight sites in northern Iraq today where the military suspected Kurdish rebels were setting up camp, the military said in a statement on its Web site. The strikes this morning targeted mountain caves and other shelters in the Zap region of neighboring northern Iraq. Iraq exports crude oil through its northern pipeline to Turkey.

``There are a lot of flashpoints being created by the geopolitical flux,'' said V. Raghuraman, senior adviser of energy at the Confederation of Indian Industry, the nation's biggest industry body. ``There are so many flare-ups -- Iraq, Nigeria, Iran and Venezuela -- that I don't see any silver lining now. Prices will stay around the current levels.''

Crude oil for February delivery gained as much as 67 cents, or 0.7 percent, to $94.80 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $94.44 a barrel at 1:04 p.m. London time. Prices have risen 55 percent this year.

Nymex crude futures reached $99.29 a barrel on Nov. 21, the highest since trading began in 1983. The number of contracts traded fell 76 percent to 44,998 on Dec. 24 from Dec. 21.

A fire at an oil pipeline in Nigeria killed about 40 people, Agence France-Presse reported, citing a police spokesman it didn't identify. The fire erupted after the pipeline was vandalized by looters in Lagos, southern Nigeria.

Iraq's Exports

Iraq exported 1.9 million barrels of oil a day in September compared with 1.69 million barrels a day in August, according to data supplied by the U.S. Department of State. The Middle East oil producer holds the world's third-largest crude oil reserves.

Brent crude for February settlement rose as much as 81 cents, or 0.9 percent, to $93.51 a barrel on London's ICE Futures Europe exchange. It traded at $93.17 a barrel at 1:04 p.m. London time today.

Turkish Prime Minister Recep Tayyip Erdogan said yesterday attacks on bases of the Kurdistan Workers Party, or PKK, in Iraq would continue.

Erdogan told lawmakers of his Justice and Development Party today that the military was targeting only the PKK. News reports have cited Iraqi Kurdish leaders as saying that ``several'' civilians have been killed.

Bombing Raids

Turkey launched bombing raids against the PKK in Iraq on Dec. 16 and Dec. 22 and briefly sent troops over the border. As many as 175 PKK fighters were killed in the first of those attacks, the Turkish military said on its Web site.

The military had killed five Kurdish rebels in an operation inside Turkey, the BBC reported on its Web site yesterday, citing a statement from the Turkish military.

``That has made the market nervous,'' said Tetsu Emori, a fund manager at Astmax Futures Ltd. in Tokyo. ``Geopolitical issues are still out there keeping the upside risks intact.''

Crude oil also rose on speculation that a U.S. Energy Department report tomorrow will show inventories in the world's largest energy user fell for a sixth week.

Crude-oil stockpiles dropped 1.63 million barrels in the week ended Dec. 21, according to the median of responses by eight analysts surveyed by Bloomberg. The department is scheduled to release its weekly report on inventories on Dec. 27 at 10:30 a.m. in Washington, a day later than usual because of the Christmas holiday yesterday.

U.S. Inventory

``Prices are being supported by speculation that U.S. inventory data will continue falling,'' said Masahiko Sato, a senior analyst at Ovalnext Corp. in Tokyo.

Inventories of distillate fuel, a category that includes heating oil and diesel, fell 750,000 barrels from 129.4 million the prior week, according to the survey. Seven of the analysts forecast a decline and one said there was no change.

Gasoline supplies probably rose 1.6 million barrels from 205.2 million the prior week, according to the median of responses. Seven of the analysts expected an increase and one said there was a decline.

To contact the reporters on this story: Manash Goswami in New Delhi at mgoswami@bloomberg.net; Nesa Subrahmaniyan in Singapore at nesas@bloomberg.net.

Last Updated: December 26, 2007 08:11 EST