Oil recovers from 3-month low

SINGAPORE (Reuters) - Oil rose on Thursday after dipping to three-month lows on worries over slowing U.S. demand, as the market's focus returned to supply concerns in Turkey, Nigeria and Iran.

U.S. crude rose 29 cents to $118.87 a barrel by 7:01 a.m. British time, regaining some traction after losing more than $6 in the last three sessions. The contract is almost 20 percent off the record of $147.27 a barrel hit on July 11.

London Brent crude climbed 38 cents to $117.38.

Supply disruptions and the prospect of escalating tension between Iran, the world's fourth largest producer, and the West helped to counter investors' broad-based pullback from commodities.

BP Plc had declared force majeure on Azeri crude shipments from Ceyhan after an explosion late on Tuesday at the Baku-Tbilisi-Ceyhan (BTC) oil pipeline in eastern Turkey halted oil flows along the key pipeline.

Supply disruptions in Nigeria due to militant attacks also supported prices, even as the oil minister said some production had been resumed after two major pipelines damaged in attacks last week were repaired.

Worries mounted that tension between Iran and the West would escalate, as the U.S. State Department said major powers had agreed to consider more U.N. sanctions against the world's fourth-largest oil producer after Tehran gave no concrete reply to their demand to freeze its nuclear activities.

But oil's rise on Thursday was tepid, damped by bearish sentiment on demand in the United States, the world's top energy consumer, and outflows of investment money.

"While in our view many of the fundamentally bullish elements of the market remain in place, buying interest has for now taken a step back," Harry Tchilinguirian, an oil analyst at BNP Paribas, said in a research note.