UPDATE 11-Oil lower as offshore damage from Isaac seen limited

* Hurricane damage to offshore rigs expected to be limited

* EIA says U.S. crude oil stocks rose last week

* Coming up: US jobless claims data 8:30 a.m. EDT Thursday (Recasts, updates prices, market activity)

By Robert Gibbons

NEW YORK, Aug 29 (Reuters) - Brent crude prices edged lower in choppy trading on Wednesday, while U.S. oil futures fell on expectations that damage to oil facilities from Hurricane Isaac will be limited and in reaction to data showing a sharp rise in U.S. crude oil stocks.

Brent crude losses were tempered by upcoming North Sea maintenance, the ongoing turmoil in the Middle East and the possibility of a strike by Norwegian oil service sector workers.

Technical support was a factor, with Brent's pull back stalling 2 cents above its 200-day moving average of $111.48 a barrel, traders said.

Hurricane Isaac drove water over the top of a levee on the outskirts of New Orleans, but the multibillion-dollar barriers built to protect the city itself after the 2005 Katrina disaster were not breached, officials said.

"It is expected that oil production in the Gulf of Mexico will quickly return to normal," said Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt.

Isaac was downgraded to a tropical storm by the U.S. National Hurricane Center after crude prices settled.

Brent October crude eased 4 cents to settle at $112.54 a barrel, having swung from $111.50 to $113.30 during the session.

U.S. October crude settled down 84 cents at $95.49 a barrel. Its $96.37 session peak fell short of the 200-day moving average of $96.72.

Total U.S. crude trading volume was 41 percent below the 30-day average and Brent's turnover, while outpacing the U.S. dealings, lagged the 30-day average by 8 percent.

With front-month refined product futures set to expire on Friday, U.S. RBOB gasoline for September delivery slipped more than 2 cents, while heating oil also dipped.

Also weighing on oil prices was the possibility that consuming nations may release strategic oil reserves.

The White House reiterated on Wednesday that the option to tap the U.S. reserve was "on the table," but the spokesman said he had no announcement a day after the Group of Seven finance ministers said they recognized the danger to the global economy from high prices and stood ready to call on the International Energy Agency to ensure the market is well supplied.

U.S. OIL INVENTORIES

U.S. crude oil inventories rose 3.78 million barrels to 364.52 million in the week to Aug. 24, the U.S. Energy Information Administration said on Wednesday, against expectations stocks would fall 1.5 million barrels.

Crude stocks in the Gulf Coast region rose 3.18 million barrels, the EIA data showed.

Distillate stocks rose 873,000 barrels versus a forecast for a 100,000-barrel drop and gasoline stocks fell 1.51 million barrels, in line with expectations.

The EIA data showing a rise in crude oil stocks came after Tuesday's American Petroleum Institute data, which said crude stocks rose 5.5 million barrels last week.

ISAAC LINGERS

Isaac battered the U.S. Gulf Coast on Wednesday, but companies and government officials have so far not verified or reported any discernible damage to shut refineries or offshore oil and gas platforms.

The Gulf of Mexico accounts for 23 percent of the nation's oil production and 7 percent of natural gas output. As of Wednesday, U.S. government figures showed 94.7 percent of offshore oil production and 71 percent of natural gas output offline.

Isaac's slow trek through the region could keep the fate of Louisiana refineries uncertain through Wednesday, although initial reports did not indicate significant damage to plants. (Additional reporting by David Sheppard in New York, Ramya Venugopal in Singapore and Christopher Johnson in London; Editing by Bob Burgdorfer and Marguerita Choy)