Oil up on Iran fears; growth worry limits gain

(Reuters) - Oil prices rose on Monday in tug-of-war trading as supply risks and tensions over Iran's nuclear program provided support, but concerns about economic growth in China and the United States limited gains.

The potential for supply disruptions due to Iran's row with the West over Tehran's nuclear ambitions continued to bolster oil prices as U.S. President Barack Obama met Israeli Prime Minister Benjamin Netanyahu in Washington, hoping to convince Israel to give sanctions against Iran more time.

"The geopolitical risk factor is putting a floor under (the price)," said Michael Hewson, senior market analyst at CMC.

Intensified sanctions, including a European Union ban on importing Iranian oil slated for July, along with Iran's threats to shut the Strait of Hormuz shipping lane have helped push Brent crude prices up 15 percent in 2012.

Brent April crude rose 46 cents to $124.11 a barrel as of 1:45 p.m. EST, after falling to $122.66 and testing below the 10-day moving average of $123.62.

U.S. April crude was up 5 cents at $106.75 a barrel, having dropped to $105.50 and reached $107.42, a penny under front-month U.S. crude's 10-day moving average.

Crude futures trading volumes were tepid, with Brent and U.S. turnover substantially below 30-day averages.

The United Nations' International Atomic Energy Agency said Iran had tripled its monthly production of higher-grade enriched uranium. The IAEA chief said the agency had "serious concerns" about possible military dimensions to Tehran's activities.

An explosion hit the gas pipeline between Egypt, Israel and Jordan in Northern Sinai on Monday, witnesses and state TV said.

Another supportive supply concern came from Canada, where Syncrude Canada Ltd shut a coker unit following a Friday fire, reducing production at the 350,000-barrels-per-day oil sands project by nearly a third.