Jan. 17 (Bloomberg) -- Crude oil approached a three-month high in New York on concern supplies will be disrupted from Nigeria and Iran, which together account for 7.5 percent of global production.

Pipeline sabotage cut Nigeria's output 4 percent in the past six days, while western nations stepped up pressure on Iran to scrap its nuclear program. The U.S. and U.K. are calling for the United Nations Security Council to act against Iran, which may lead to sanctions on OPEC's second-largest producer.

``Concern about supply means the risk premium in prices is on the rise,'' said Dariusz Kowalczyk, a senior investment strategist at CFC Seymour Ltd. in Hong Kong. ``Iran is the major problem, but Nigeria coming on top makes matters worse.''

Crude oil for February delivery rose as much as $1.08, or 1.7 percent, to $65 a barrel on the New York Mercantile Exchange. It was trading at $64.96 at 9:31 a.m. London time. Oil, which is still 8.3 percent lower than its August record of $70.85, has gained 34 percent in the past year. Prices reached $65.05 last week, the highest intraday price since Oct. 4.

Nymex was closed for the Martin Luther King public holiday in the U.S. yesterday, when prices in London gained 1.1 percent.

``There just isn't the spare capacity'' to cover production threats like these, said Andrew Harrington, industry analyst at Australia & New Zealand Banking Group Ltd. in Sydney. ``Everybody is pumping about as much as they can.''

Shell Evacuates

In London, Brent crude for March settlement today gained 42 cents, or 0.7 percent, to $63.60 a barrel on the ICE Futures exchange,

Yesterday, Brent ended at $62.93, the highest close since Sept. 30, after Royal Dutch Shell Plc said its joint venture in Nigeria evacuated staff from its Benisede flow station and three neighboring plants because of the ``growing insecurity in the area.'' The evacuation may delay repairs to the Trans-Ramos pipeline, where an explosion on Jan. 11 halted output of 106,000 barrels a day, or about 4 percent of Nigerian production.

Armed militants attacked Benisede on Jan. 15, killing at least 14 soldiers, the Nigerian newspaper ThisDay reported. One worker was killed and 10 were injured, Shell said. Nigeria is Africa's biggest oil producer.

The attack is the latest in a wave of violence in the Niger River delta region, including the Jan. 11 kidnapping of four contract workers from the Shell-run offshore EA field and a Dec. 20 attack on another oil pipeline that temporarily cut exports from the Bonny terminal.

The four foreign workers are still being held hostage, Shell said. The 115,000 barrel-a-day EA field resumed pumping Jan. 13, after a one-day shutdown.

``Nigeria produces mostly the light, sweet crude oil for which there is more demand,'' Anette Einarsen, an oil analyst at Nordea Bank AB in Oslo, said yesterday. ``With Iran, my main concern is that we won't see a solution for a while.''

Iran Examined

Diplomats from the U.S., the U.K., France, China and Russia met in London yesterday to discuss calling an emergency meeting of the International Atomic Energy Agency, the UN's nuclear watchdog. U.K. Foreign Minister Jack Straw said Iran is failing to meet responsibilities to the world over its nuclear program.

Iran pumps almost 5 percent of the world's oil, or 3.9 million barrels a day. That's more than Saudi Arabia, the country with the largest extra capacity, could compensate for. The cushion to cope with supply disruptions has dwindled as global demand for crude oil surged over the past two years.

Oil has risen almost 7 percent this year as funds increased investments in the commodity sector, diversifying their holdings from the equity and debt market. Mutual funds invested $6 billion of new money in commodities markets last year, according to data compiled by U.K. bank Barclays Capital.

``Speculators in the crude oil market continued to cover short positions and enter fresh long positions over the past weeks,'' Barclays Capital analysts, led by Kevin Norrish in London, said in a report yesterday. ``This hardly comes as a surprise given the current geopolitical tensions in Iran.''

To contact the reporters on this story: Will Kennedy in Singapore at wkennedy3@bloomberg.net.

Last Updated: January 17, 2006 04:44 EST