LONDON - OIL prices rose for a third day running on Friday, again surpassing 100 dollars (S$143) a barrel, at the end of an extremely volatile week for financial markets.

New York's main contract, light sweet crude for delivery in October, jumped 2.49 dollars to 100.37 dollars a barrel.

London's Brent North Sea crude for November gained 2.21 dollars to 97.40 dollars a barrel.

'Prices continue to rise as market confidence returns, buoyed by a US government rescue plan alongside ongoing supply-side disruptions,' Barclays Capital oil analyst Kevin Norrish said in London.

The US government said it was putting together a rescue plan to clear away the mountains of bad debt that have weighed down banks in the past year.

In other news affecting the oil market on Friday, the main militant group in southern Nigeria - the Movement for the Emancipation of the Niger Delta (MEND) - said it had destroyed a major oil pipeline belonging to Royal Dutch Shell.

The attack is the fifth on a Shell facility in Rivers State, the centre of Nigeria's oil industry, in the space of a week.

Since it first emerged in early 2006 MEND, which says it is fighting for a larger share of southern Nigeria's oil revenue to go to local people, has cut Nigeria's oil production by more than one quarter.

Oil prices had on Thursday briefly surged above 102 dollars (S$146.45), as the US currency fell after major central banks offered short-term loans worth billions of dollars to financial institutions struggling to obtain funds amid a global squeeze on credit.

A weak dollar makes oil cheaper for buyers holding stronger foreign currencies. Oil, like gold, is also seen as a haven investment in times of economic turmoil.

Crude prices had jumped about six dollars on Wednesday after the US government's 85-billion-dollar bailout of insurance giant AIG failed to reassure skittish traders and prompted a rush into commodities as a safe haven from the financial market storm.

However on Tuesday, crude futures struck seven-month lows under 90 dollars as turmoil on the financial markets ignited worries about the prospect of a further drop in energy demand, traders said.

Opec this week cut its world oil demand growth forecast for 2008 to 1.02 percent from 1.17 per cent previously, in the face of falling demand already occurring in the United States, the world's biggest energy consumer. -- AFP