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UPDATE 8-Oil rises as Turkey-Syria tensions offset growth worry

Tuesday, 9 Oct 2012 | 11:36 AM ET

* Escalating Turkey-Syria conflict poses supply risk

* Saudi oil minister wants to see Brent fall towards $100

* IMF cuts global growth forecast

* Iraq's oil exports up, output may double by 2020

* Coming up: API oil data 4:30 p.m. EDT Wednesday

(Recasts, updates prices, market activity; changes byline and dateline, pvs LONDON)

By Robert Gibbons

NEW YORK, Oct 9 (Reuters) - Oil prices rose more than 1 percent on Tuesday, after two sessions with lower settlements, as the threat of supply disruption in a tense Middle East countered concerns about slower growth and resulting sluggish demand for oil.

NATO said on Tuesday it had drawn up plans to defend Turkey if necessary against any further spillover of violence from Syria's border areas where rebels and government forces are fighting for control.

"It's a political risk premium coming into the market now, not really supported by fundamental data," said Andy Sommer, oil market analyst with EGL in Switzerland.

"If you look at the demand side, prices should be a bit lower than they are currently. But the risk, or fear, that this Turkey-Syria conflict might spread further in the Arab world is increasing that risk premium."

The turmoil in Syria has reinforced the concerns about supply security already raised by the ongoing dispute between Iran and Israel and the West over Tehran's controversial nuclear program.

The dispute over the nuclear issue has led to tough U.S.-led sanctions on Iran and a European Union (EU) ban on importing Iranian crude.

U.S. RBOB gasoline futures jumped 2 percent during Tuesday's session, continuing to be lifted by tight gasoline supply in the U.S. East Coast region combined with seasonal and unplanned work curbing refinery capacity utilization.

Brent November crude rose $1.33 to $113.15 a barrel by 11:25 a.m. EDT (1525 GMT), having reached $113.99.

The price increase pushed Brent back above the 200-day moving average of $112.18 and the 50-day moving average of $112.68, key technical levels watched by chart-watching traders.

U.S. November crude was up $1.64 at $90.97 a barrel, after reaching $91.04 and moving back above the 100-day moving average of $89.86.

Brent's premium to U.S. crude increased, moving above $23 a barrel intraday, as delays in the October loading of North Sea Forties cargoes and the Middle East uncertainties have helped push Brent's premium to its highest since October 2011.

The geopolitical tensions countered concerns about slowing economic growth reinforced when the International Monetary Fund cut its global growth forecast for the second time since April and warned U.S. and European policymakers that failure to fix their economic ills would prolong the slump.

Oil prices also were tempered during Tuesday's session when Saudi Arabia reiterated its intention to keep high oil prices from harming a sputtering global economy.

OPEC's biggest oil producer is likely to continue pumping crude at a 30-year high around 10 million barrels per day (bpd)through October, Saudi Oil Minister Ali al-Naimi said on Tuesday, helping compensate for the cut in exports from sanctions-hampered Iran.

Naimi said oil prices were still too high and Riyadh would like Brent to fall closer to $100 a barrel.

More supply is also on the way from neighboring Iraq, OPEC's second-biggest producer after Saudi. Exports this month are expected to rise above 2.8 million bpd, the highest in decades, and efforts are underway to more than double output by 2020.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 24-Hour Brent chart: 24-hour U.S. crude chart: IMF revises growth forecasts: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Additional reporting by Peg Mackey and Alice Baghdjian in London and Ramya Venugopal in Singapore; Editing by Marguerita Choy)

((robert.gibbons@thomsonreuters.com)(+1 646 223 6059)(Reuters Messaging: robert.gibbons.reuters.com@reuters.net))

Keywords: MARKETS OIL/