Brent up on supply worry, economic concerns check gain

Mon Aug 13, 2012 4:13pm EDT
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By Robert Gibbons

NEW YORK (Reuters) - Brent crude prices rose on Monday in choppy trade, hitting a three-month peak on concerns about North Sea supply and Middle East tensions, while fears about a slowing global economy checked gains.

U.S. crude closed lower for a second straight session and Wall Street equities slipped after six days of gains, weighed down by data showing Japan's economy expanded in the second quarter at half the pace expected.

A separate report showing Greece's economy contracted by 6.2 percent on an annual basis in the quarter also fanned concerns about economic growth.

Brent jumped more than $2 and U.S. crude more than $1 early in the session on support from tightening North Sea supplies and Middle East tensions, including an intensifying debate in Israel on whether to strike Iran's disputed nuclear program.

A weak dollar also supported oil's early surge, along with continuing hopes that signs of economic weakness will spur central banks to stimulate a sputtering global economy.

Expected North Sea September production curbs and the sensitivity to Middle East supply disruptions helped increase Brent's premium over U.S. crude to $20.87 a barrel based on settlement, after reaching $21.33 intraday.

Those factors also sent front-month Brent's price premium to the nearby month to $2.02 intraday, a 2012 high, ahead of the September contract expiration on Thursday.

Brent September crude rose 65 cents to settle at $113.60 a barrel, the highest settlement since May 3. Monday's $115.11 peak was the highest intraday price since May 4.   Continued...

An attendant prepares to refuel a car at a petrol station in Rome January 4, 2012. REUTERS/Max Rossi