Aug. 26 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, rose for the first time in three days in Sao Paulo after oil prices rose and Deutsche Bank AG said a recent decline on higher tax concerns was unjustified.

Petrobras gained 1.1 percent to 34.19 reais. The stock fell 4.2 percent yesterday after Itau Corretora said the government is likely to raise taxes on existing oil concessions in the so- called pre-salt fields once production begins.

``Fears of a Brazilian oil curse are overdone,'' wrote Deutsche analyst Marcus Sequeira in a note to clients today. ``As politics plays a big role on the future of Brazil's pre-salt reserves, uncertainties regarding the industry regulatory framework are pressuring the sector's performance.''

The government removed all unsold exploration concessions in the region from an oil rights auction in November to reassess the potential of the area after Petrobras found the five billion to eight-billion barrel Tupi field in the region. O Globo newspaper reported Aug. 23 that the government may take back pre-salt oil fields that have been licensed to companies such as Petrobras.

Sequeira reiterated his `buy' rating on the stock, citing ``attractive valuation, exploration potential, and above average production growth.''

Crude oil rose more than $1 a barrel on forecasts showing that Hurricane Gustav may enter the Gulf of Mexico, home to more than a fifth of U.S. oil production.

To contact the reporters on this story: Alexander Ragir in Rio de Janeiro at aragir@bloomberg.net;

Last Updated: August 26, 2008 16:59 EDT