Brent oil edges up as Iran worries return

LONDON, Apr 19 (Reuters) Benchmark Brent crude rose for a second day on Thursday as renewed concern over Iran's nuclear programme lent support to prices after falls earlier in the week.

London Brent crude rose 46 cents to .50 a barrel by 1238 GMT after an 11-cent gain on Wednesday that pulled prices back from a three-week low of .76 a barrel.

Benchmark U.S. crude was down 53 cents at .60, pushed lower by news that Enbridge Inc. had restarted a portion of pipeline carrying Canadian oil to the U.S. Midwest. It had been shut after a leak on April 15.

Brent fell nearly 4 percent over the first two days of the week on signs Nigeria would restart the large Forcados oilfields soon after a more than year-long outage due to militant attacks.

Oil fell further after U.S. data showed a much sharper than expected rise in refinery runs -- even though gasoline stocks had fallen for the 10th week in the world's top consumer ahead of the summer season of peak demand.

Price losses were halted on Wednesday after a U.N. nuclear watchdog document said Iran, defying the United Nations, had begun making nuclear fuel under ground.

But diplomats said on Thursday it amounted to a test-scale operation rather than producing meaningful amounts of nuclear fuel -- which Iran says it needs to generate power and the West fears could be used to make atomic bombs.

''Everyone's still concerned about Iran potentially and low stocks in the U.S. Even if things looked a bit better yesterday, it is still a pretty tight market,'' said Helen Henton of Standard Chartered.

''I think it's kind of wait and see at the moment. The market is going to be pretty jumpy.'' Potentially adding support for prices was Chinese data showing the economy, with its booming demand for commodities, grew 11.1 percent from a year earlier in the first quarter of 2007, up from 10.4 percent in the previous quarter.

The strength of the growth, however, prompted concerns over further interest rate rises by the central bank and that drove stock markets lower in China and further afield.

Despite Nigeria's hopes of bring back the Forcados output, traders are keeping a close eye on the West African country ahead of presidential elections on April 21 given fears that any major violence could add to oil industry disruption.

REUTERS SR KP2049