NEW YORK (Bloomberg) — Crude oil rose more than $2 a barrel yesterday after Morgan Stanley said that Brent oil from the North Sea could "easily" reach $150 a barrel.

Prices are rising because "supply constraints are biting against the backdrop of still-strong global demand", Richard Berner, co-head of global economics at Morgan Stanley, said in a report yesterday. Oil rose above $130 a barrel for the first time last week after Societe Generale SA and Credit Suisse increased their price outlooks.

"When these price forecasts come out, traders don't want to be short, so they are in a way self-fulfilling prophecies," said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. Shorts are bets that prices will fall.

Crude oil for July delivery rose $2.15, or 1.7 percent, to $131 a barrel at the 2.30 p.m. close of floor trading on the New York Mercantile Exchange. Oil climbed as high as $131.58 and fell as low as $125.96 today. Futures reached $135.09 on May 22, the highest since trading began in 1983.

"Prices are swinging wildly back and forth, which indicates that the market needs to find equilibrium," said Kyle Cooper, director of research at IAF Advisors in Houston.

Brent crude oil for July settlement rose $2.47, or 1.9 percent, to $130.78 a barrel on London's ICE Futures Europe exchange. Prices declined to $126.04 earlier yesterday, the lowest since May 20. The contract touched a record $135.14 on May 22.

"While prices are high enough to curb demand in the developed economies, we think that supply limits could easily take Brent crude quotes to $150 a barrel," Berner, who is based in New York, said in the report. Morgan Stanley is the second-biggest US securities company.

The Movement for the Emancipation of the Niger Delta, Nigeria's main militant group, threatened attacks and car bombings tomorrow in the Niger Delta to mark the first anniversary of President Umaru Yar'Adua's inauguration.

MEND, which has shut down about 20 percent of Nigeria's oil production since February 2006, has increased its assaults on Nigeria's oil infrastructure since April. Nigeria was the fourth-biggest source of US oil imports during the first three months of this year, according to the US Energy Department.

Dow Chemical Co., the largest US chemical maker, will raise prices on all of its products as much as 20 percent because of surging costs for energy, raw materials and transportation.

The increases are needed after a 42 percent jump in first-quarter spending on raw materials and energy, chief executive officer Andrew Liveris said yesterday in a statement. The increases take effect on June 1, Midland, Michigan-based Dow said.

Dow is trying to pass on higher costs amid company forecasts that spending on energy and hydrocarbon-based ingredients will climb to $32 billion this year, a fourfold increase from 2002.