UPDATE 6-Oil rises on weak dollar, geopolitical risk
* Obama would accept short-term increase in debt ceiling
* North Sea crude set to reach a 2013 high in November
* U.S. weekly crude stockpiles seen up 1.4 mln barrels
* Oil production in Gulf of Mexico ramping up towards normal
(Updates prices, changes byline, dateline pvs LONDON)
NEW YORK, Oct 8 (Reuters) - Crude oil prices on both sides of the Atlantic rose on Tuesday, as the dollar remained weak and geopolitical risk crept back into the markets.
Analyst Jim Ritterbusch described the U.S. budget crisis as "somewhat of a 2-edged sword" for oil prices. He said the budget crisis has weakened the U.S. currency, making oil more attractive for holders of other currencies, while also clouding demand prospects and raising the possibility of a steep sell-off in oil.
"The weaker dollar is definitely lending support to dollar-based commodities," said John Kilduff, partner at Again Capital LLC in New York.
Political clashes in Egypt and the capture by U.S. forces of a senior al Qaeda figure in Libya over the weekend raised the specter of supply disruptions in a region that pumps a third of the world's oil.
"It's going to make a lot of sense for 1/8al Qaeda 3/8 to strike at oil infrastructure" in Libya, said Kilduff.
Upward pressure on Brent was expected to ease as the supply of North Sea crude that underpins the benchmark is set to reach a 2013 high in November, according to loading programs.
"Oil is still doing surprisingly well, given the ongoing budget crisis in the U.S., the approach of the debt ceiling and mounting supplies," said a Commerzbank research note.
"Nevertheless, we suspect that the latest show of strength on the part of oil is only temporary, and still see downside risks in view of the factors mentioned above."
Brent rose 61 cents to $110.29 a barrel by 11:23 a.m. (1523 GMT), after earlier posting gains of over $1. U.S. oil rose 60 cents to $103.63.
Markets were concerned that the U.S. government shutdown would cut demand and hurt consumer confidence. JPMorgan economists estimate every week of shutdown translates to a 0.12 percent reduction in the U.S. quarterly annualised GDP growth rate.
U.S. President Barack Obama said on Monday he would accept a short-term increase in the nation's borrowing authority to avoid a default. The comment came only 10 days from a deadline to raise the country's debt ceiling.
Oil production in the U.S. Gulf of Mexico was ramping up towards normal on Monday after Tropical Storm Karen faltered off the Gulf Coast. Storm warnings had prompted energy firms to shut nearly two-thirds of oil output as of Saturday.
U.S. commercial crude oil inventories were forecast to have risen 1.4 million barrels in the week ended Oct. 4, a Reuters survey of six analysts showed.
The U.S. Energy Information Administration is expected to release its data on Wednesday at 1430 GMT, despite the government shutdown.
(Additional reporting by Peg Mackey in London, Jacob Gronholt-Pedersen in Singapore; Editing by Marguerita Choy)