| NEW YORK
NEW YORK Oil prices rose a second day on Monday, gaining 2 percent as loading delays for North Sea crude cargoes added to concerns about global supply disruptions and as supportive U.S. manufacturing data countered disappointing economic figures from Europe.
Crude futures extended gains on news that BP (BP.L) had shut in oil output at the Valhall platform last week for compressor maintenance and that, according to trade sources, the shutdown would delay loading of seven North Sea Ekofisk cargoes in April.
The Institute for Supply Management's index of U.S. factory activity rose to 53.4 in March from February's 52.4, topping economists' expectations and keeping the reading above 50, indicating expansion in the sector.
"Oil prices rose on the better-than-expected ISM manufacturing reading as the strength of the U.S. economy continues to offset deteriorating conditions in Europe and concerns over China's slowdown," said John Kilduff, partner at Again Capital LLC in New York.
Brent May crude rose $2.55 to settle at $125.43 a barrel, recovering back above the 30-day average at $124.25 after slumping to $121.70.
Brent gained 14.4 percent in the first quarter and reached its 2012 high of $128.40 on March 1.
U.S. May crude gained $2.21 to settle at $105.23 a barrel, having slipped to $102.06, but breaking its fall before threatening the 100-day moving average of $101.32. U.S. crude gained 4.2 percent in the first quarter.
Brent's premium to U.S. crude increased to $20.20 a barrel, based on contract settlements, after stretching to $20.56 intraday.
Total Brent trading volumes outpaced U.S. crude turnover. Brent's dealings were 9 percent above the 30-day average, while U.S. volume lagged its 30-day average by 21 percent with little over an hour left in post-settlement trading.
U.S. heating oil and RBOB gasoline futures also rose more than 2 percent, with May contracts in front-month position after Friday's expirations for April contracts.
Oil recovered after being pressured by news the euro zone's manufacturing sector shrank for an eighth month and at a faster pace in March, according to Markit's Eurozone Manufacturing Purchasing Managers' Index.
The impact from the European figures was reduced by data showing China's big factories operated at a surprisingly busy pace in March, though credit-constrained smaller manufacturers struggled.
The encouraging data pushed U.S. equities higher, with the S&P 500 index reaching a four-year peak, while the weak European numbers helped pressure the euro against the dollar and yen. .N <USD/>
But the greenback's decline against the yen and the Australian dollar depressed the dollar index .DXY. A weaker U.S. dollar can lift dollar-denominated oil prices by making oil cheaper for consumers using other currencies.
STORY on euro zone PMI: <EUR/PMIM>
For a 24-hr technical outlook on Brent:
IRAN, SANCTIONS, SUPPLY
Iran and six world powers will meet in Turkey on April 13-14 for a round of talks on Tehran's disputed nuclear program, U.S. Secretary of State Hillary Clinton said on Saturday, as many oil-consuming nations consider alternatives to Iranian barrels.
While potential interruptions to Iranian supply and bans because of sanctions have been the primary concern, actual supply has been cut in Syria, Yemen and South Sudan. On Sunday, Sudan and South Sudan accused each other of launching attacks in the oil-producing area straddling their border.
Saudi Arabia is pumping almost 10 million barrels per day (bpd), the highest in decades, and insists there is no shortage of supply. OPEC production overall is at the highest since 2008, according to a Reuters survey. <OPEC/O>
U.S. oil demand in January was revised higher by 169,000 bpd from the previous estimate, the Energy Information Administration said on Monday, but that still left demand down 853,000 bpd, or 4.46 percent, from the year-earlier period.
Ahead of weekly reports on U.S. oil inventories, crude stocks were expected to have risen last week, according to a Reuters survey of analysts on Monday.
Distillate and gasoline stocks were expected to be lower.
(Additional reporting by Alex Lawler in London and Francis Kan in Singapore; Editing by Dale Hudson and Alden Bentley)