By Barani Krishnan
NEW YORK (Reuters) - Oil prices rose as much as 2 percent on Monday, up for a third straight session with Brent hitting seven-month highs, as Nigeria's oil industry reeled from crippling attacks and traders said data pointed to fresh draws in U.S. crude stockpiles.
Output of Nigeria's Bonny Light crude has fallen by an estimated 170,000 barrels per day (bpd) following recent attacks on pipeline infrastructure, industry sources said on Monday. Total crude production has fallen more than 500,000 bpd in a country that was once Africa's biggest oil producer.
Supply outages from elsewhere, including Canada, Libya and Venezuela, were also forcing U.S. refiners to draw more from domestic crude stockpiles.
Market intelligence firm Genscape reported a drop of just over 1 million barrels in inventory at the Cushing, Oklahoma delivery point for U.S. crude futures during the week to June 3, traders who saw the data said.
"At this point, there is no sign that the Nigeria (situation) is getting any better, and it's looking worse," said Scott Shelton, energy broker with ICAP in Durham, North Carolina.
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Any spare U.S. refining capacity arising from optimum refinery runs during the summer might not be enough to balance the market without deeper stock drawdowns that would support crude prices more, he said.
Brent crude futures were up 86 cents, or 1.7 percent, at $50.50 a barrel by 12:00 p.m. EDT (1600 GMT), after reaching a session peak of $50.83, the highest since November.
U.S. crude futures rose $1.05, or 2 percent, to $49.68, after peaking at $49.90 for the session.
On Friday alone, militants staged three attacks in Nigeria's Niger Delta, promising to cut output to zero. Such attacks were "rapidly deteriorating and getting out of control", and pressuring the country's stretched finances, a local youth group said.
The Muslim holy month of Ramadan began on Monday and was expected to boost transportation in Muslim-dominated countries, increasing oil demand.
Some developments limited the advance in oil prices.
Total said three of its five French refineries will resume operations after several weeks of strikes.
Also, supply from Iran was returning to international oil markets quicker than expected.
The U.S. oil rig count, meanwhile, rose last week for the second time this year, signalling higher production to come.
Traders were looking toward Federal Reserve Chair Janet Yellen's speech at 12:30 p.m. EDT (1630 GMT) for hints about whether the U.S. central bank plans a rate hike. The dollar index was flat, after weakening on Friday which made it less expensive for those holding the euro and other currencies to buy dollar-denominated oil.
(Additional reporting by Julia Payne in LONDON and Henning Gloystein in SINGAPORE; editing by Jason Neely, William Hardy and David Gregorio)