* Investors uneasy after Iran rejects offer of direct talks
* Restart of BP, Whiting crude unit delayed -report
* Colonial Pipeline expects additional 100,000 bpd by Q2
(Adds Exxon Mobil force majeure in Nigeria)
By Gabriel Debenedetti
NEW YORK, Feb 7 Brent crude oil rose to a near
five-month high above $117 a barrel on Thursday after Iran
rejected calls for direct talks with the United States, while
U.S. crude prices fell amid pressure from growing domestic
stockpiles in the Midwest.
Brent's premium over West Texas Intermediate (WTI) crude
rose to more than $21 a barrel, the highest this year, after a
report said a key refinery in the U.S. Midwest would remain shut
for maintenance for longer than previously expected.
The delayed restart of a 260,000-barrel-per-day crude unit
at BP's Whiting, Indiana, refinery will potentially add to the
glut of oil at Cushing, Oklahoma, delivery point for the U.S.
Brent finished 51 cents higher to settle at $117.24
a barrel, the highest close since mid-September.
U.S. crude dropped 79 cents to $95.83 a barrel. The
Brent-WTI spread finished at $21.41 a barrel, the highest since
Brent, the international benchmark, found support after
Iran's supreme leader, Ayatollah Ali Khamenei, rejected an offer
from U.S. Vice President Joe Biden to negotiate over Tehran's
nuclear program, dimming prospects for a resolution of the
dispute seen as a major risk factor for oil markets.
"The Brent market is a little more sensitive to geopolitical
risk and tensions, and reports that the leader in Iran said he
doesn't want to engage in direct talks with the United States,
that ratcheted up a bit of the geopolitical risk," said Gene
McGillian, analyst at Tradition Energy in Stamford, Connecticut.
Traders have been closely watching the stand off with Iran
due to concerns about supplies from the OPEC nation.
Additionally, Exxon Mobil on Thursday declared force
majeure on Nigeria's benchmark Qua Iboe crude oil exports due to
pipeline repair work, the company's local unit said, cutting
output from Africa's top producer.
Oil markets have taken additional support from signs that
the economies of the United States and China, the world's two
top oil consumers, are recovering at a quicker pace than before.
The Chinese economy ended seven straight quarters of slowing
growth with a 7.9 percent lift in the fourth quarter, data
showed on Wednesday.
The number of Americans filing new claims for jobless
benefits fell last week and put the four-week average reading at
a near five-year low, but other data showed a productivity drop
in the fourth quarter due to weak economic output.
U.S. benchmark gasoline prices fell by 1 percent on
Thursday to $2.9999 a gallon, the lowest so far in February.
Colonial Pipeline, which operates the main pipeline carrying
gasoline to the East Coast from the Gulf Coast refining hub,
said Thursday it expects an additional 100,000 barrels-per-day
of capacity to be available on its line to North Carolina by the
(Additional reporting by David Sheppard, Ron Bousso and Simon
Falush in London, Ramya Venugopa in Singapore; Editing by David
Goodman, Jane Baird, Bob Burgdorfer and Alden Bentley)