Tokyo rubber steady, oil prices support

TOKYO, May 12 (Reuters) - Tokyo rubber futures on Monday hovered close to Friday's closing levels, with support coming from near record-high crude oil prices.

* The key Tokyo Commodity Exchange rubber contract for October delivery <0#JRU:> was flat at 308.4 yen per kg at 0127 GMT, after moving between 306.6 yen and 309.3 yen.

* Traders have said they expect rubber to consolidate at the 300-yen level, before moving higher and probably challenging this year's peak of 324.3 yen marked on Feb. 26.

* Oil hovered close to record levels above $126 a barrel as violence in the Middle East heightened worries of supply disruptions in the world's largest crude-producing region.

* U.S. light crude for June delivery CLc1 was at $125.70 in Globex electronic trading after it closed $2.27 higher at $125.96 on Friday. It rose to a record $126.27 in late post-settlement trade on Friday.

* Higher crude oil prices are often a positive factor for rubber as investors believe they will encourage a shift to natural rubber from synthetic rubber, a petroleum product.

* The dollar stood around 102.99 yen <JPY=>, compared with late U.S. levels of around 102.83 yen.

* The dollar came under pressure on Friday as another round of credit market losses prompted investors to reduce exposure to risky assets and heightened concern about the health of the U.S. economy.

* Physical rubber supplies are tight due to rain in some of the producing areas, which has disrupted tapping. Some traders said they expect prices to come down once production normalises. (Reporting by Miho Yoshikawa)