Oil surged more than a dollar to over US$70 a barrel on Monday as unrest in Nigeria kept markets on edge for further supply disruptions from Africa's top exporter.

London Brent jumped $1.07 to US$70.49 by 1741 GMT after trading as high as US$70.83 earlier. U.S. crude gained 96 cents to US$65.90.

Unknown assailants broke into an unused Nigerian oil well operated by Total on Monday, causing a minor spill, a company spokesman said. There were no injuries nor any impact on oil output.

Nation's oil output

Rising violence in Nigeria since February 2006 hascut a third of the OPEC nation's oil output and forced thousands of expatriates to evacuate.

"The uncertainty over Nigeria oil production and the continuing worries over U.S. gasolene supply seem to be behind this latest rally on crude," said Phil Flynn, analyst at Alaron Trading in Chicago.

Sources at private security firms had earlier reported an attack on a Total oil facility in Nigeria using high explosives.

The French company said no explosives were used.

Ongoing refinery problems in the United States have drawn down gasolene stocks ahead of the peak summer gasolene demand season, propping up prices in recent weeks.

Despite the prolonged Nigerian outage, oil ministers from the Organisation of the Petroleum Exporting Countries were satisfied that demand for crude oil was being met.

"The market is very well supplied, in fact it is oversupplied," OPEC President Mohammed al-Hamli, who is also oil minister for the United Arab Emirates, told Reuters on Monday.

OPEC is due to meet on September 11 to decide output policy. Prices also drew support as Iran, the world's No. 4 oil exporter, pressed ahead with its atomic work.

A senior Iranian official said on Saturday the country has started building its first domestically made atomic power plant - a move which could deepen Tehran's standoff with the West over its nuclear programme.

The West fears Iran's atomic work is aimed at making weapons. Tehran says it only wants to produce electricity.

"In the next decade Iran will be one of the most talked-about countries in the world regarding domestic nuclear energy," Mohammad Saeedi of Iran's Atomic Energy Organisation was quoted as saying by the ISNA news agency.

- Reuters