* Oil settles higher after nearly $4 hike on Wednesday
* Uncertainty around Iran supportive
* U.S. gasoline stock draw signals improving demand
(Recasts, updates prices)
By Rebekah Kebede
NEW YORK, Oct 1 (Reuters) - Oil prices rose slightly on
Thursday as the West's negotiations with Iran about the OPEC
member's nuclear program sparked concern that outweighed demand
worries prompted by lackluster U.S. economic data.
U.S. crude futures <CLc1> settled at $70.82 a barrel, up 21
cents. The previous session saw a rise of nearly $4, the
biggest daily jump in dollar terms since April.
London Brent crude <LCOc1> settled 12 cents higher at
$69.19 a barrel.
"The Iran factor (was) pumping up the risk premium
...whenever you talk about Iran, you're going to get a mixed
interpretation of what's going on," said Jim Ritterbusch,
president, Ritterbusch & Associates, Galena, Illinois.
Six Western leaders met with in Geneva with Iran for rare
bilateral talks to discuss Tehran's nuclear program, which has
been a bullish factor in oil markets in recent years.
"Iran must demonstrate through concrete steps that it will
live up to its responsibilities with respect to its nuclear
program," U.S. President Barack Obama said on Thursday.
President Obama said Tehran must grant the International
Atomic Energy Agency access to a second nuclear site and
demonstrate the country's nuclear program is peaceful.
In late 2008, Iran threatened to block the Strait of
Hormuz, the sea route through which approximately 40 percent of
the world's globally traded oil passes, when tensions escalated
in another row with the United States around the nuclear
program.
"Traders think the possibility of the negotiations going
poorly should be factored into prices," said Peter Beutel,
president, Cameron Hanover, New Canaan, Connecticut.
Oil prices were also propped up by evidence of increasing
U.S. gasoline demand in government data released on Wednesday.
Gasoline inventories dropped by 1.6 miillion barrels to
211.5 million while gasoline demand jumped 5.4 percent over the
last four weeks compared to year-ago levels, according to a
weekly Energy Information Administration report.[]
"Gasoline demand was up in the latest week with the EIA
reporting a drawdown and that has encouraged follow-through
buying," Beutel said.
The oil market has been looking to economic data for signs
of a broad economic recovery.
Oil prices were pressured earler in the day by weak
economic data showing that the U.S. manufacturing sector missed
analyst expectations for growth in September and jobless claims
increased last week.
The U.S. manufacturing sector expanded in September, but
missed analyst expectations, according a report from the
Institute for Supply Management.[]
A U.S. Labor Department report showed the number of U.S.
workers seeking jobless benefits climbed last week.
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(Additional reporting by Robert Gibbons and Gene Ramos in
New York, Emma Farge in London; Editing by David Gregorio)
