UPDATE 8-Oil moderately higher, supported by storm
* U.S. government shutdown drags into fourth day
* CFTC not publishing Commitments of Traders report
* Tropical Storm Karen shuts half of oil output in Gulf of Mexico
* Louisiana Offshore Oil Port shuts
(Adds details on shutdown, U.S. dollar and CFTC report. Updates prices)
NEW YORK, Oct 4 (Reuters) - Oil was trading with slim gains on Friday as the budget standoff in the United States continued and uncertainty about when it would end gripped the market.
As the shutdown entered its fourth day - with nearly 1 million government workers at home without pay - some federal agencies and programs stopped functioning, cutting into the release of key economic data.
The U.S. Commodity Futures Trading Commission, for instance, will not publish its weekly Commitment of Traders report that was scheduled for 3:30 p.m. EDT (1930 GMT).
Global leaders and analysts were concerned the shutdown would hurt economic growth and limit oil demand in the world's largest oil consumer.
Oil prices got a slight boost, but were off session highs, after U.S. President Barack Obama said he would sign a bill passed in House of Representatives that would retroactively pay furloughed government employees.
Brent crude was last trading 37 cents higher at $109.37 at 2:17 p.m. EDT (1617 GMT), after trading as high as $109.77. U.S. oil was trading 43 cents higher at $103.74, after rising as high as $104.19.
Both contracts were narrowly headed for the first gain in three weeks, although it looked like it would be less than 1 percent.
Oil prices pared gains sharply earlier in the session after U.S. House of Representatives Speaker John Boehner said the House will not vote on a spending bill to end the government shutdown without conditions. He also demanded spending cuts in exchange for raising the government's debt ceiling.
The comments suggested the political stalemate in Washington would continue.
Also, the United States faced the possibility of defaulting on its financial obligations on Oct. 17 as the opposing political parties remained locked in debate over whether to raise the debt ceiling.
An approaching tropical storm in the Gulf of Mexico continued to limit losses. Half of oil output was shut in the U.S. Gulf of Mexico ahead of Tropical Storm Karen's arrival, providing support.
The Louisiana Offshore Oil Port (LOOP)suspended marine operations starting at noon CDT (1700 GMT) on Friday.
"I think the market got a little bit of a boost from concerns about Tropical Storm Karen and the shutdown of some wells," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.
He said the market is pricing in some of its concerns about the Gulf shutdown's impact. The U.S. Gulf Basin provides nearly one-fifth of daily U.S. oil output.
The dispute over U.S. government spending has weighed on financial markets and sapped the dollar, which was off an eight-month low of 79.627 on Friday against a basket of major currencies. It was last trading at 80.166.
A weaker dollar is supportive for oil, as importing nations find it cheaper to buy dollar-priced oil in their own currencies.
(Additional reporting by Robert Gibbons in New York, Alexander Winning in London and Jacob Gronholt-Pedersen in Singapore; Editing by Jason Neely, James Jukwey, Jeffrey Benkoe, Andrew Hay and Peter Galloway)