* Oil trades mixed as US futures fall to 1-month low
* North Sea maintenance idles some European oil supply
* Weak global factory data sows energy demand doubts
* Oil rose sharply in early trade after U.S. debt deal
(Adds oil market volatility, paragraphs 17, 18)
By Joshua Schneyer
NEW YORK, Aug 1 (Reuters) - Brent crude edged higher on Monday as North Sea oilfield maintenance and violence in the Middle East helped offset weaker global factory data that fed doubts about the energy demand outlook.
U.S. crude fell to its lowest settlement in more than a month as the dollar firmed, reversing earlier gains on optimism about a pending deal to raise the U.S. debt ceiling.
Brent crude for September delivery recovered late in the day to settle up 7 cents at $116.81 a barrel. It had seesawed lower earlier, after briefly trading above $120 in the morning.
U.S. crude for September
Brent turned positive in part due to pipeline and platform maintenance in the North Sea that could affect European supply this week. [ID:nL6E7J10JM]
BP
France's Total
"The continued problems in the North Sea, Forties in particular, are supporting Brent and helping boost its premium to the U.S. counterpart," said Tom Bentz, director at BNP Paribas Commodities Futures Inc in New York.
In the latest escalation of turmoil in the Middle East, Syrian military tanks shelled the city of Hama, bringing the death toll from days of clashes there to at least 85, and western leaders voiced outrage at the attacks. [ID:nL6E7J10N4]
WEAK FACTORY DATA
Oil futures jumped in early trade, buoyed by optimism over a deal in Washington to stave off a U.S. debt default, But oil later fell after a report showed the Institute for Supply Management (ISM) U.S. manufacturing index dropped to its lowest since July, 2009.
Also, several surveyes from around the world showed the global manufacturing sector expanded last month at the slowest rate in two years. [ID:nL6E7J10Q9]
The U.S. dollar firmed 0.5 percent against a basket of foreign currencies, pushing up the cost of crude priced in dollars for most foreign currency holders. <.DXY>
Republican and Democratic party leaders agreed late Sunday to the terms of a deficit reduction plan that would avoid default and raise the U.S. debt ceiling. Congress still must vote to approve the deal.
"The initial euphoria of the debt deal seems to be waning," said Gene McGillian of Tradition Energy in Connecticut.
"There's still plenty of uncertainty surrounding the debt deal ahead of congressional votes, and a disappointing ISM number has now taken some of the bidding out of the market."
After initially rising, stock markets also fell, with U.S. equities dropping for a sixth consecutive session. [.N]
IMPLIED VOLATILITY, 200-DAY MOVING AVERAGE
Brent crude traded in an unusually wide range of nearly $6 a barrel on Monday.
The CBOE oil volatility index <.OVX>, which measures volatility in U.S. oil futures based on options pricing, increased to its highest level since June 24. [ID:nN1E7701AF]
U.S. crude broke below its 200-day moving average price of $94.94, a move that can sometimes precede heavier levels of technical selling. (Graphic: http://link.reuters.com/jub92s )
Data from Germany showed primary German energy use fell by 3.2 percent in the first half of 2011 from the same period of 2010, in part due to high oil prices. [ID:nLDE77010V]
Cyprus may soon have to seek an international debt bailout if it fails to repair its finances, the island's largest commercial bank warned on Monday. [ID:nL6E7J10W]
Several U.S. oil and gas producers were ramping up oil output in the Gulf of Mexico following dissipation of Tropical Storm Don, which had forced several oil platforms to shut down since late last week. [ID:nN1E7700K7]
Meteorologists were still watching a tropical wave in the eastern Atlantic that could become Tropical Storm Emily, potentially moving through the Gulf of Mexico oil region as it approaches the southern U.S. coastline by the end of the week.
U.S. government figures showed that only around 2.3 percent of U.S. Gulf of Mexico oil production remained shut mid-Monday due to Don, down from as much as 6 percent on Sunday.
A major Asian refinery, Formosa's <6505.TW> 540,000 bpd plant in Taiwan, will shut down for repairs lasting 1-2 weeks at least, following a fire over the weekend, a spokesman said. [ID:nnL3E7J10J]
The shutdown may last longer, pending an investigation after the Formosa refinery had its seventh fire in a year.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Full coverage of U.S. budget and debt [ID:nUSBUDGET]
FACTBOX-Elements of possible US debt deal [ID:nN1E76T0AF]
US DEBT CRISIS http://r.reuters.com/nud82s
Global manufacturing PMIs http://r.reuters.com/paz82s
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Additional reporting by Ikuko Kurahone in London, Robert Gibbons and Jeffrey Kerr in New York and Alejandro Barbajosa in Singapore; Editing by David Gregorio)