NEW YORK (Reuters) - Brent crude prices rose in choppy trading on Thursday, supported by supply concerns and geopolitical tensions, while U.S. crude fell as oil companies assessed damage after Hurricane Isaac’s trek through the region.
A possible strike by Norway’s oil services workers, upcoming North Sea maintenance and the ongoing dispute over Iran’s nuclear program continue to bolster Brent prices.
Brent remained on pace to post a second straight monthly gain of more than 7 percent, with U.S. crude also on track for a 7 percent rise in August.
“Brent has more geopolitical risk associated with it and it is North Sea maintenance season,” said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Iran is preparing for a possible major expansion of uranium enrichment in a fortified underground facility, the U.N.’s International Atomic Energy Agency said in a report on Friday.
The IAEA said “no concrete results” have been reached in talks with Iran this year and that important differences remain.
Brent October crude edged up 11 cents to settle at $112.65 a barrel, having swung from $112.25 to $113.44.
On August 16, Brent hit a three-month peak at $117.03 as the September contract expired and went off the board at $116.90 a barrel, the highest settlement since May 2.
Brent has recovered from a low of $88.49 posted on June 22 after retreating from the 2012 peak at $128.40 hit on March 1.
U.S. October crude fell 87 cents to settle at $94.62 a barrel, having fallen to $93.95 during the session, a two-week low, and needing to finish the week above $96.15 to avoid breaking a string of four straight weekly gains.
Brent’s premium to U.S. crude increased to $18.03 a barrel, based on settlements. The spread has been hemmed in a $15-$20 range for two weeks.
Total crude trading volumes remained in the summer doldrums with Brent and U.S. crude turnover more than 20 percent below their respective 30-day averages.
Ahead of front-month September contract expirations, U.S. RBOB gasoline futures settled 1.77 cent per gallon lower, while heating oil managed a 0.88 cent gain.
Gasoline was heading for a 5 percent monthly gain, with heating oil on track for a 10 percent rise in August.
Phillips 66 (PSX.N) said its Belle Chasse, Louisiana, refinery was partially flooded, but there were few other reports of infrastructure damage as companies in the U.S. Gulf Coast region assessed the impact of Isaac, now downgraded to a tropical depression.
Along with end-of-month positioning, Thursday’s price moves may have been influenced by investors taking positions ahead of Friday’s speech by U.S. Federal Reserve Chairman Ben Bernanke at a gathering of central bankers and economists in Jackson Hole, Wyoming.
Investors will look for any hint of a third round of quantitative easing, with more stimulus expected to weigh on the U.S. dollar and boost dollar-denominated oil.
The dollar index .DXY was up slightly on Thursday and the euro declined against the dollar a second straight day as investors pared back expectations the Fed chief will hint at near-term monetary easing in Friday’s speech.
Supply from the 12-member Organization of the Petroleum Exporting Countries rose in August to 31.53 million barrels per day, up from 31.30 million bpd in July, according to a Reuters survey.
Iran’s oil shipments have risen slightly in August and indicated Saudi Arabia and its Gulf Allies have not been pumping more this month, the survey showed.
A European Union embargo on importing Iranian oil is completing its second month.
Additional reporting by Julia Payne in London and Florence Tan in Singapore; Editing by Bob Burgdorfer and Marguerita Choy