March 10 (Bloomberg) -- Crude oil rose for a second day on concern that disruption to Nigeria's output may worsen and rising demand for gasoline will erode stockpiles before the peak summer driving season.

Militants in Nigeria, where rebels have cut production by about a fifth, attacked a tanker in the Niger River Delta, the military said yesterday. Gasoline gained on concern changes to fuel specifications may extend maintenance shutdowns which last week cut refinery volumes to a four-month low.

``Nigeria's production is still 20 percent under where it should be and it's the fifth-largest supplier'' to the U.S., said Mike Sander, a commodities broker at Altavest Worldwide Trading Inc. in Mission Viejo, California. ``The longer refining output is down, that's just going to push up the products and the price of crude as well.''

Crude oil for April delivery rose as much as 31 cents, or 0.5 percent, to $60.78 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $60.55 at 9:47 a.m. London time.

Yesterday, the April contract rose 45 cents, or 0.8 percent, to $60.47 a barrel. Prices declined to $59.55 as a government report showed U.S. stockpiles of natural gas, which competes with oil-based products, fell less than expected last week.

``As we go into the driving season we will see further tightness in supply and demand,'' said Arjuna Mahendran, chief economist and strategist at Credit Suisse in Singapore.

Oil fell 5.7 percent in the first three sessions this week after the Organization of Petroleum Exporting Countries said it will maintain production at a two-decade high, and after a government report showed U.S. crude oil supplies jumped last week to their highest since May 1999.

Oil Survey

Oil prices may fall next week as the end of the winter heating season leads to a decline in fuel consumption, a Bloomberg News survey shows.

Twenty of 44 analysts, traders and brokers, or 45 percent, said prices will drop next week. Thirteen forecast a gain and 11 expected little change. Thirty-five percent of respondents predicted an increase a week ago.

Kidnappings and attacks in Nigeria the past two months have forced Royal Dutch Shell Plc to idle 455,000 barrels a day of output. Four soldiers and a policeman were killed in a March 8 gun battle after militants tried to capture the tanker MV Spirit, a military spokesman said yesterday.

``The Nigerian rebels have shown they are able to interdict shipments,'' Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands, said yesterday. ``It won't be surprising if there are more disruptions.''

Bonny Light

U.S. refiners, which use about 10 percent of the world's oil to make gasoline, favor low-sulfur grades like Nigeria's Bonny Light and Qua Iboe.

Despite the violence, Nigeria plans to keep April shipments of the two grades unchanged at about 22 million barrels, according to two traders who handle the shipments and asked not to be identified.

Gasoline for April delivery rose a third day, gaining as much as 1.3 cents, or 0.8 percent, to $1.7331 a gallon in after- hours trading. It climbed 4.2 percent to $1.7201 yesterday, the biggest percentage gain on world commodity markets.

U.S. gasoline demand averaged 9 million barrels a day the past four weeks, 2.5 percent higher than a year ago, the Department of Energy said March 8.

Refinery Closures

Refineries used 82.9 percent of their capacity last week, down 2.3 percentage points from the week before, as units were shut for maintenance before peak summer gasoline demand.

The closures may be extended as refiners re-tool plants to make gasoline with the additive ethanol, rather than MTBE, or methyl tertiary butyl ether, which is being phased out. Cutting MTBE may reduce supplies by as much as 145,000 barrels a day, said Valero Corp., the biggest independent U.S. oil refiner.

``The switch is not going to be that smooth,'' Kevin Kerr, president of Kerr Trading International LLC in Norwalk, Connecticut, said yesterday. ``Within the next 14 days, I think we are going to see prices steadily climb.''

Oil prices have traded between $69.20 and $57.55 a barrel during the past seven weeks. It rose to a four-month high on Jan. 23 on concern Iran, the world's fourth-largest producer, may cut exports if the United Nations imposes sanctions to try and stop the Islamic republic's nuclear research program.

Iranian President Mahmoud Ahmadinejad yesterday said Iran won't back down on its nuclear plans. The UN Security Council will meet next week on the issue.

``The market is at a do-or-die moment,'' Michael Fitzpatrick, vice president of energy risk management at Fimat USA Inc. in New York, said yesterday. ``There now has to be a decisive move to take out the recent highs or the market will take its cue from the fundamentals, which are bearish.''

To contact the reporter on this story: Gavin Evans in Wellington, New Zealand at gavinevans@bloomberg.net

Last Updated: March 10, 2006 04:55 EST