UPDATE 4-Oil rises towards $119, risk appetite rises
* Iran converts some enriched uranium into reactor fuel
* North Korea confirms it carried out nuclear test
* U.S. crude stocks seen up 2.9 mln bbls -Reuters poll
(Updates prices, comments)
LONDON, Feb 12 (Reuters) - Oil rose towards $119 a barrel on Tuesday as investors assessed political developments in the Middle East and regained their appetite for risk.
Tension in the Middle East remained high over Iran's nuclear programme, and analysts said investor concerns were focussed more on Iran than on North Korea's third nuclear test.
Brent crude, which expires on Wednesday, was up 58 cents at $118.71 a barrel by 1126 GMT, after settling down 77 cents on Monday.
U.S. crude was up 27 cents at $97.30 a barrel.
"Fresh speculative money coming into the market, more effective sanctions on Iran and cold weather are all supportive for oil," said Christopher Bellew, a broker at Jefferies Bache.
The U.N. Security Council will hold an emergency meeting to discuss North Korea's test at 9 a.m. EST (1400 GMT) on Tuesday.
But it was Iran's nuclear programme that preoccupied oil dealers. Iran is converting some of its higher-grade enriched uranium into reactor fuel, the Islamic republic's foreign ministry spokesman said.
Israeli Prime Minister Benjamin Netanyahu said on Monday the new centrifuges Iran was installing for its uranium enrichment programme could cut by a third the time needed to create a nuclear bomb. Tehran says the nuclear programme is for peaceful energy purposes
U.S. OIL INVENTORIES
Oil markets were also focusing on weekly inventory data in top consumer the United States. U.S. commercial crude oil stockpiles are expected to have increased by 2.9 million barrels last week, a preliminary Reuters poll of four analysts showed on Monday.
Distillate stocks, which include heating oil and diesel fuel, were projected to be down 800,000 barrels on average, while gasoline inventories were seen unchanged.
Industry group the American Petroleum Institute is to release its weekly report at 1630 EST (2130 GMT). The U.S. government's Energy Information Administration is set to follow with its own figures on Wednesday.
Developments in the euro zone threatened to weigh further on equities and global oil demand, though recent data has shown stronger international trade in China, which helped Brent touch a nine-month high above $119 a barrel on Friday.
The oil market also looked ahead to the finance ministers from the Group of 20 nations scheduled to meet in Moscow on Friday and Saturday.
The Group of Seven nations are considering a statement this week reaffirming their commitment to market-determined exchange rates in response to rising rhetoric about a currency war, G20 officials said on Monday.
(Additional reporting by Osamu Tsukimori in Tokyo; Editing by Alison Birrane and Jane Baird)