Brent crude climbs above $120 on Iran, North Sea

Brent crude rose on Thursday for a fourth day in a row, topping USD 120 a barrel -- a six-month intraday high -- on worries about supply from Iran and from the North Sea, where output was expected to dip next month.

US  crude erased an early USD 1 decline and rose to a six-week high as upbeat data on jobless claims and housing brightened the outlook for domestic energy demand. The US  data also helped lift Brent.

"Despite renewed worries that the EU will be unable to address the Greek debt crisis .... the Brent market continues to press the upside on Iranian supply fears," said Tim Evans, energy analyst at Citi Futures Perspective in New York.

In London, ICE Brent April crude was up 97 cents at USD 119.90 a barrel, by 11:58 p.m. EST (1658 GMT). . Brent hit a session high of USD 120.38, the highest since an intraday high of USD 120.40 on August 1.

In euro terms, Brent prices were the highest since 2008, according to Reuters data.

US  March crude was up 57 cents at USD 102.37, having fallen earlier to USD 100.84. It hit a session high of USD 102.69, the highest since January 12's high of USD 102.98.

The April/April Brent-WTI spread widened to around USD 17.50, from USD 16.79 at the close on Wednesday.

The spread's widening followed US  government data on Wednesday showing a 2.0 million barrel increase in stockpiles last week at the US  delivery point in Cushing, Oklahoma. Supplies at the hub rose to the highest level since September and the gain was the biggest weekly rise since December 2009.

Initial US  claims for unemployment benefits unexpectedly fell last week to near a four-year low, suggesting the labour market recovery was gaining steam, and housing starts rose more than expected in January.

Iran's ambassador to Russia said plans to cut off supplies of Iranian crude to Europe would benefit only the Islamic republic, which in the past has been heavily dependent on imported fuel due to restricted refining capacity.

In another front, Iran, the world's fifth-largest oil exporter, proposed an early resumption of long-stalled nuclear talks with world powers, according to a letter from Tehran to European Union policy chief Catherine Ashton obtained by Reuters on Thursday.

On Wednesday, oil prices jumped early after Iranian state television reported that the country was halting its crude exports to six European countries before the EU ban on Iranian crude takes effect in July. This was later denied by Iran's oil ministry, helping pare session gains.

Crude oil output from the North Sea, home of the global Brent benchmark, is set to fall in March for a third month due to maintenance work and natural aging of oilfields there.

Supply will average 2.18 million barrels per day in March, down 1.4% from 2.12 million bpd the previous month, data compiled by Reuters showed on Tuesday.