UPDATE 9-Oil rises as Turkey-Syria tensions fuel supply concerns


* Turkey, Syria fighting reinforces worry over Middle Eastsupply

* North Sea crude output set to fall in November

* Coming Up: CFTC positions data 3:30 EDT Friday

(Recasts first paragaph, updates prices)

By Robert Gibbons

NEW YORK, Oct 11 (Reuters) - Oil prices rose on Thursday totheir highest levels in weeks as tensions between Syria andTurkey escalated, while maintenance on North Sea oilfieldspushed the premium for Europe's Brent crude to another one-yearhigh.

Turkey was accused by Moscow of endangering Russian livesafter it forced a Syrian passenger plane to land and seized whatit suspected was military equipment being ferried from Russia toSyria and the embattled government of President Bashar al-Assad.

Damascus said intercepting the Syrian Air plane was an actof piracy, and the incident follows the previous warning byTurkey's chief of staff that Ankara would use greater force ifshells from Syria continued to hit Turkish territory.

"The Syrian situation is heating up and there are fearsabout Turkey, a NATO member, retaliating and contagion in theregion," said Bjarne Schieldrop, analyst at SEB in Oslo.

Brent November crude

rose $1.38, or 1.21 percent, tosettle at $115.71, just off the day's high.

U.S. November crude

rose 82 cents, or 0.9 percent, tosettle at $92.07 a barrel, with the closely watched Brent/WTIspread reaching its widest differential in a year at some $23.50a barrel.

Brent's premium to U.S. crude has risen nearly $8 a barrelin the past three weeks, with the European benchmark squeezed bydeclining North Sea output. Production from 12 streams is set tofall by about 1 percent in November.

Oil prices are being whipsawed by pressure from concernsabout lower global fuel demand amid slowing economic growth,while the risk of supply disruptions in the Middle East andloading delays for crude from the North Sea provide support.


Crude oil stocks rose 1.67 million barrels last week, twiceas much as expected, but a steep drop in distillate stocks and aless dramatic slip in gasoline stocks kept concerns about tightfuel supplies in focus.

Distillate stockpiles dropped 3.18 million barrels, muchmore than the consensus forecast of half a million barrels,while gasoline stocks fell 534,000 barrels.

U.S. heating oil

futures churned higher, up more than1 percent, while RBOB gasoline

edged lower.

"Nearby RBOB futures were the weak component of the complexin today's trade amid a couple of refinery restarts and massiveliquidation out of long RBOB, short heating oil spreadpositions," Jim Ritterbusch, president at Ritterbusch &Associates, said in a note.

More supportive data showing the fewest U.S. initial joblessclaims in more than four years last week helped push U.S.equities higher on Wall Street.


Graphic on 24-hr Brent chart analysis

Graphic on WTI-Brent spread


(Additional reporting by Jonathan Leff in New York, SimonFalush and Alice Baghdjian in London and Florence Tan inSingapore; Editing by Bob Burgdorfer and Jim Marshall)

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

Keywords: MARKETS OIL/