UPDATE 6-Oil resumes decline, falling towards $101
* Oil gives up earlier gain, hits lowest since June 3
* Brent fell $3.97 on Thursday, biggest daily drop since Nov
* Iraq and Lebanon alarmed at spread of Syria war
(Recasts with falling prices)
LONDON, June 21 (Reuters) - Oil fell towards $101 a barrel on Friday, giving up an earlier rise, as the focus returned to concern about slowing demand and ample supply, as well as the U.S. Federal Reserve's plans to wind down its stimulus programme.
Brent crude on Thursday posted its biggest daily loss since November during a broader market rout, in which for oil, demand growth concerns following weak manufacturing data from China added further pressure.
After a modest rally earlier in the session, Brent was down 85 cents to $101.30 by 1403 GMT and traded as low as $101.18, the lowest since June 3. U.S. oil was down 43 cents at $94.71. On Thursday, Brent ended down $3.97 and U.S. oil finished $2.84 lower.
China's factory activity weakened to a nine-month low in June as demand faltered, adding to data pointing to a sluggish economy and raising the chances the country could miss its growth target of 7.5 percent for this year.
"A slowing of China's manufacturing sector certainly suggests that oil demand growth from the world's largest oil demand growth engine will also certainly slow," said Dominick Chirichella of Energy Management Institute. China is the world's second biggest oil consumer.
"The likelihood of supply continuing to outstrip demand is going to continue forward."
In a sign that supply is ample, a U.S. Energy Information Administration report this week showed U.S. crude stocks rose by 313,000 barrels last week, against expectations of a 500,000 barrel decline. The U.S. is the top oil consumer.
Prices drew some support from concern about potential supply disruptions in the Middle East, with violence in Syria threatening to engulf neighbouring countries.
Iraq warned Syria's civil war is tearing the Middle East apart and Lebanon's president urged his country's Hezbollah movement on Thursday to pull its fighters out of the conflict.
Syria's turmoil is dragging its neighbours into a deadly confrontation between Shi'ite Iran supporting President Bashar al-Assad and Sunni Arab Gulf nations backing Syrian rebels.
(Additional reporting by Alex Lawler in London, and Manash Goswami and Jessica Jaganathan in Singapore; editing by James Jukwey and Keiron Henderson)