Brent steady above $117 on demand revival hopes, Iran woes

Brent crude held steady above $117 on Thursday on hopes of demand growth revival as Greece inches closer to getting its debt crisis under control while concerns over supply disruption from the Middle East provided added support.

Greece's leaders are continuing talks to resolve one remaining issue to conclude a deal on a bailout package, giving investors hope a contagion engulfing Europe will be avoided. Geopolitical risks worsened as violence in Syria escalated and as Iran renewed a threat against the United States.

Front-month Brent gained 16 cents to $117.36 a barrel by 0323 GMT, rising for an eighth straight day, after ending at a six-month high. US crude added 13 cents to reach $98.84 a barrel in its third day of increases.

"There is hope that the Greek debt crisis will be sorted out soon with an agreement on all the components getting discussed," said Natalie Robertson, at ANZ bank. "On the supply side, there are a lot of risks at the moment and that will keep prices supported, particularly Brent."

The supply risks and expectations of a revival in demand growth in Europe will push Brent prices higher, and that may keep the price difference with the US benchmark wide for now, Robertson said.

Brent's premium against US crude was around $18 on Thursday. It touched an intraday high of $20.71 on Tuesday, the widest since October.

Oil markets face supply worries from Nigeria, while shipments from South Sudan have stopped due to a dispute over transit fees and revenue share with its neighbour Sudan.

"Outside of Iran, there are fresh supply risks coming from Nigeria," Robertson said. "We already have a disruption from Sudan, and all these factors are supporting prices."

Prices rose even as crude and oil product inventories in the world's top consumer, the United States, increased last week and gasoline demand slipped sharply from year-ago levels, the US Energy Information Administration reported.

Crude stocks rose 304,000 barrels to 339.25 million barrels in the week to February 3, the data showed, much less than the 2.4 million barrel build forecast in a Reuters poll.

Brent will rise to $118.65 per barrel as indicated by its wave pattern, while US oil will retrace to $97.77 per barrel, as it has failed a resistance at $99.59, Reuters technical analyst Wang Tao said.

Investors await forecasts for global oil demand from the Organisation of Petroleum Exporting Countries due on Thursday and from the Paris-based International Energy Agency on Friday.

The US EIA this week raised its 2012 and 2013 forecast for global oil demand growth and said supply would tighten as gains in non-Opec output lag, adding support to oil futures.