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UPDATE 6-Oil rises, but off high, after rally on economic data

* U.S. initial jobless claims fall in latest week

* UK economy posts GDP rise in third quarter

* Coming up: CFTC positions data 3:30 p.m. EDT Friday

(Recasts with updated prices, market activity; changes dateline, pvs LONDON)

NEW YORK, Oct 25 (Reuters) - Brent crude futures edged higher in choppy trading on Thursday, lifted by economic data, but gains were limited by rising oil inventories and tepid demand figures.

Brent is trying to snap a string of seven straight lower settlements, but remained on pace to post a weekly loss. U.S. crude prices seesawed near flat after briefly turning lower and trying to avoid a sixth straight session of losses.

Oil was supported by British government data showing gross domestic product rose 1.0 percent in the third quarter, beating forecasts for a 0.6 percent gain after GDP contracted 0.4 percent in the previous quarter. 1/8ID: nL5E8LP6AS 3/8

U.S. economic reports on Thursday were mixed. Initial jobless claims fell last week, supporting oil prices, but the four-week average was up. Durable goods orders were up more than expected in September, but excluding defense and aircraft, were unchanged.

The durable goods figures supported the view that companies are holding back investments because of fears the U.S. Congress will fail to avert sharp tax increases and spending cuts in 2013.

A government report showing U.S. crude oil stocks jumped 5.9 million barrels last week continued to weigh on oil prices.

The inventory rise was well above the expected increase of 1.9 million barrels in a Reuters survey of analysts. Demand for refined products over the previous four weeks was below the year-before period, the Energy Information Administration said.

``The market is still struggling because of the high inventory numbers and the weak demand, even with the better economic data,'' said Phil Flynn, an analyst at Price Futures Group in Chicago.

Brent December crude rose 40 cents to $108.25 a barrel by 12:15 p.m. EDT (1615 GMT). Thursday's $107.46 low trade put Brent briefly below the 100-day moving average of $107.58.

U.S. December was up 6 cents at $85.79 a barrel, having swung from $85.23 to $86.75.

Wednesday's settlement was the lowest since July.

``We're seeing a small short-covering bounce,'' said Tony Machacek, a broker at Jefferies Bache in London. ``Longer term, maybe, we're due to be heading lower.''

Analysts said a resumption of maintenance-curbed production in the North Sea and a reduction of geopolitical risks could push oil prices down.

``We expect Brent prices to ease towards $100 at year-end. The 2012 average remains $110,'' ABN Amro Commodity Research team said in a note to clients.

``With early elections in Israel (Jan. 22), the immediate threat of an escalation between Israel and Iran is pushed back towards the spring/early summer in 2013. (Therefore) a lower risk premium could be seen in the near term,'' it said.

(Reporting by Robert Gibbons in New York, Alice Baghdjian in London and Manash Goswami in Singapore; Editing by Peter Galloway)