Crude oil futures rose above $114 a barrel on Monday, lifted by worries that a Tropical Storm could suspend U.S. oil production and hints of another round of monetary stimulus by the U.S. Federal Reserve.
Supply cuts have already played a role in pushing prices up nearly 30 percent since June with international sanctions hitting Iranian exports and maintenance affecting North Sea oil flows.
Brent crude futures were up $1.04 at $114.63 a barrel by 1022 GMT. U.S. crude was up $1.0 at $97.20.
Tropical Storm Isaac swirled into the Gulf of Mexico on Monday and meteorologists at Weather Insight, an arm of Thomson Reuters, predict the storm will spur short-term shutdowns of 85 percent of the U.S. offshore oil production capacity. [ID:ID:nL2E8JP1T1] "The storm is probably helping but there's better sentiment generally. Everybody is waiting to see if Jackson Hole will be a turning point for commodities," said Eugen Weinberg, global head of commodities research at Commerzbank.
Central bankers and economists are due to meet in Jackson Hole, Wyoming later this week where Fed Chairman Ben Bernanke will deliver a speech that will be scoured for clues on a third round of quantitative easing.
He told a Congressional oversight panel in a letter that the Federal Reserve has room to deliver additional monetary stimulus to boost the U.S. economy.
The markets will also look for policy signals from the euro zone ahead of a Sept. 6 meeting of the European Central Bank.
Fighting in Syria and tensions over Iran's disputed nuclear programme have helped support oil prices this summer, although they are still below the August peak of $117.03 a barrel.
Other supply concerns are also helping to support Brent prices.
Delays in Iraq's pipeline construction threaten to stall production at Royal Dutch Shell's Majnoon oilfield for at least three months, forcing the field to miss a 2012 target of 175,000 barrels per day.
In Norway, oil services workers broke off wage talks with oil companies on Friday, taking the sector a step closer to its second strike within two months.
Norway's vital oil sector was hamstrung last month when production workers held a 16-day strike over pay and the right to early retirement, driving up oil prices.
U.S. gasoline prices also increased after a fire at Venezuela's biggest refinery, the 645,000 barrels per day (bpd) Amuay plant.
One factor that could cap gains on oil is possible oil reserve releases by Washington or the International Energy Agency. The IEA, whose chief recently dismissed the need for a release, is now thought to have agreed to the idea, the industry journal Petroleum Economist said, citing unnamed sources.
Reuters reported that the White House was "dusting off" old plans for a possible release on fears that rising oil prices could undermine the effect of sanctions on Iran. (Editing by James Jukwey)