Brent oil rises, key European summit eyed

A petrol station is seen outside Hanoi September 22, 2011.

NEW YORK (Reuters) - Brent crude prices rose on Thursday, recovering from intraday lows after a joint statement from France and Germany eased concerns about deep divisions hampering efforts to resolve Europe's debt problems.

The statement said European leaders would discuss a global solution to the crisis on Sunday but no decisions would be adopted before a second meeting to be held by Wednesday.

U.S. crude pared losses as the front-month November contract expired and went off the board.

The euro turned higher against the dollar and the S&P 500 and Dow Industrials on Wall Street moved up after they had fallen on uncertainty about whether European leaders would even meet, much less fashion a deal to resolve the debt crisis.

The unsettled situation in Europe and its potential to stifle demand sent prices for copper, a key industrial metal, nearly 7 percent lower, and gold fell for a fourth straight day.

The 19-commodity Reuters-Jefferies CRB index .CRB fell 1.0 percent.

"We're really just waiting on Europe," said Phil Flynn, analyst at PFGBest Research in Chicago.

ICE Brent crude for December rose $1.37 to settle at $109.76 a barrel, having traded from $107.31 to $110.17.

The expiring U.S. front-month November crude fell 81 cents to settle at $85.30 a barrel. U.S. December crude fell only 22 cents to settle at $86.07 a barrel.

Brent's trading volume was 1 percent below its 30-day average and U.S. volume 13 percent under.

Brent's premium to its U.S. counterpart rose to $23.69.

Brent's recovery and a forecast for a cold winter helped push U.S. heating oil futures higher. U.S. gasoline futures also ended with a gain.

A strengthening La Nina in the United States this winter will cause colder and wetter weather to the North and drier and warmer conditions in the South, government forecasters said.

"There are some concerns about oil supplies tightening, which has kept oil somewhat bullish. Relative to the other commodities and equities, it has been the least prone to moving lower," said John Kilduff, partner at Again Capital LLC in New York.

SUPPLY AND INVENTORIES EYED

Inventories have tightened in the United States. U.S. crude stocks fell sharply last week, against expectations stockpiles would be higher, according to Wednesday's report from the U.S. Energy Information Administration.

Refined products stocks also fell, the EIA said, much more than expected by analysts.

Oil product inventories in the Amsterdam-Rotterdam-Antwerp hub have fallen to their lowest in nearly three years as backwardation, a condition in which prices are lower in months further out than the front month, has reduced the incentive to store products.

While North Sea production problems have been supportive to oil prices and Brent in particular, traders and analysts expect the return of Libyan oil exports to continue unaffected by the death of Libya's ousted leader Muammar Gaddafi.

Gaddafi was killed by fighters who overran his hometown Sirte on Thursday.

Seaborne oil exports from OPEC, excluding Angola and Ecuador, are expected to rise by 240,000 barrels per day in the four weeks to November 5, UK consultancy Oil Movements said in its latest weekly estimate.

U.S. DATA MIXED

Sales of U.S. existing homes dropped 3 percent in September, dampening some of the optimism created by separate reports showing initial jobless claims fell and that factory activity in the U.S. Mid-Atlantic region rebounded.

The S&P 500 and Dow Industrials rose, erasing earlier losses, after the comments by French and German leaders eased concerns before Sunday's summit. .N

(Additional reporting by Gene Ramos in New York, Claire Milhench in London and Manashi Goswami in Singapore; Editing by Marguerita Choy, Sofina Mirza-Reid and Dale Hudson)