UPDATE 7-Brent rises in heavy spread trading, eyes on Iran
* Iran agrees to talks with six world powers, including U.S.
* Iranian president to address UN General Assembly
* Iraq boosts oil output after stopping pipeline leak
* Libya may reopen eastern Hariga port this week -official
(Updates prices to settlement)
NEW YORK, Sept 24 (Reuters) - Brent oil rose on Tuesday in spread trading that widened the international benchmark's premium to U.S. crude, as market players closely eyed easing tensions between Iran and the West.
Brent trading was choppy, edging between small losses and gains throughout the day while front-month U.S. crude fell, pushing Brent's premium out by nearly $1 to a high of $5.56 a barrel.
Easing geopolitical concern had weakened Brent prices, which are generally more closely tied to global outages than U.S. oil futures, in recent sessions, helping to narrow the spread to below $3 last week.
Market participants were parsing comments from U.S. President Barack Obama, who struck a cautiously optimistic tone in a speech at the United Nations, saying the United States was ready to engage diplomatically with Tehran.
The West's standoff with Iran over the OPEC nation's nuclear program has helped support oil prices for nearly a decade. Years of sanctions have cut Iranian oil exports by more than 1 million barrels per day (bpd).
Concerns around Syria had also lent support to prices over the past month. Brent peaked above $117 a barrel in August on fears the war in Syria would spiral out of control and hit Middle East oil output, but it has slowly unwound over $9 of risk premium as the chances of U.S. military intervention and a wider conflict have receded.
"You have a couple of issues being addressed at the U.N. that would take some of the political pressure out of the market," said Bob Yawger, director of commodity futures at Mizuho Securities in New Jersey.
Front-month Brent crude for November delivery rose 48 cents to settle at $108.64. November U.S. crude lost 46 cents to close at $103.13 a barrel.
Market players said that profit-taking on the spread between Brent and U.S. crude contributed to the uneven action between the two contracts. Further pressure on U.S. crude came from signs refiners in the world's top oil consumer were taking units offline for the fall maintenance season.
"Without that strong demand, WTI crude is going to get pressured," said John Kilduff, partner at Again Capital LLC in New York.
U.S. RBOB prices edged up 1.5 percent after three sessions of losses.
Iran has agreed to talks on its nuclear program with top diplomats from six world powers on Thursday, including U.S. Secretary of State John Kerry, increasing hopes Tehran's relations with the United States could thaw.
However, a potential encounter at the United Nations on Tuesday between U.S. President Barack Obama and Iranian President Hassan Rouhani proved too complicated, an Obama administration official said.
The United Nations may this week back a U.S.-Russian plan to rid Syria of chemical arms. Syria is not a major oil producer but traders worry any escalation of Middle East violence could disrupt oil flows.
Supply has improved, meanwhile, as Iraq boosted output from its Rumaila field after plugging a leaking pipeline, although planned work continued to keep a lid on exports from OPEC's No. 2 producer after Saudi Arabia.
Libya is also gradually ramping up output after protests crippled its oil sector. The OPEC producer could reopen its eastern Hariga port this week but there has been no progress opening larger eastern terminals that have been shut for weeks, a senior government official said on Monday.
(Additional reporting by Christopher Johnson in London, Florence Tan in Singapore; editing by Andrew Hay and Nick Zieminski)