By Fayen Wong
PERTH (Reuters) - Oil was little changed at $145 on Monday as the risk of supply disruptions wiped away losses linked to massive U.S. aid for embattled mortgage lenders Fannie Mae and Freddie Mac that bolstered confidence in the financial sector.
Prices initially fell by more than $2.50 as the dollar bounded higher, but erased those losses as Brazilian oil workers began a five-day strike. Dealers were also on edge after Nigerian militants abandoned a cease-fire and Iran's president promised a harsh response against those who threatened the OPEC member.
U.S. light crude for August delivery slipped 6 cents to $145.04 a barrel by 0356 GMT after touching a session low of $142.49 a barrel in early electronic trade.
London Brent crude fell 4 cents to $144.45.
"Oil's fall this morning is generally due to gains in the U.S. dollar as well as some profit-taking in the market," said Gerard Burg, a commodities analyst from the National Australian Bank in Melbourne.
"But there are still a lot of upside risks and there's nothing much to stop prices from heading towards the $150 mark in the coming weeks or months."
After tumbling in the early part of last week, oil prices lurched higher on Thursday and Friday, surging more than $8 in two days to hit a record high $147.27 a barrel on production threats in Brazil and Nigeria, plus geopolitical anxiety over Iran and dollar weakness linked to fears over Fannie and Freddie.
On Monday attention shifted briefly back toward the financial sector after the U.S. Treasury Department and the Federal Reserve launched sweeping measures on Sunday to restore confidence in Fannie Mae and Freddie Mac
The dollar inched up from near a record low against the euro on Monday, driving some traders to unwind recent oil buying as a hedge against the falling dollar, but optimism among equity traders was tempered by concerns that the government plan highlighted the extent of the sector's woes.
Oil prices have risen seven-fold since 2002 amid surging demand from China and other emerging markets, and jumped 50 percent this year alone, battering the economies of consumer nations already hit hard by the global credit crunch.
SUPPLY FEARS
Fundamental concerns again came to the fore as Brazilian oil workers at national energy giant Petrobas began a planned five-day strike at the country's key fields in the Campos basin at midnight on Sunday.
Campos accounts for more than 80 percent of Brazil's crude output of 1.8 million barrels per day.
"Oil prices moved back up because the market saw buying opportunities around $143. There are a lot more upside risks to prices in the short terms, especially tension between Iran and Israel," said Ryuichi Sato, an analyst at Mizuho Corporate Bank in Tokyo.
Iran's president said his country would strike its enemies before they managed to fire a shot, media reported on Sunday, part of an escalating war of worlds on its nuclear ambitions fuelling Middle East tensions.
Missile tests last week by Iran, against a backdrop of rising tensions with Israel and the United States, have left the oil markets worried about a potential supply disruption from the world's No. 4 exporter.
In Nigeria, the main militant group in the oil-producing Niger Delta said last week it was abandoning a cease-fire to protest against a British offer to help tackle lawlessness.
Oil shipments from the world's eighth biggest exporter have fallen by a fifth since 2006 due to escalating violence in the delta.
