UPDATE 9-Crude oil rises on strong U.S. economic data
* ISM services index rose to highest level in 8 years
* U.S. jobless claims fall to near five-year low
* U.S. crude stocks fall 1.84 million barrels
* Coming up: U.S. payroll data, 8:30 a.m. EDT (1230 GMT?
(Updates to settlement)
NEW YORK, Sept 5 (Reuters) - Oil futures rose on both sides of the Atlantic on Thursday as bullish U.S. economic data and a drawdown in U.S. crude inventories implied increasing demand in the world's biggest oil consumer.
Gains were tempered by concerns that the strong economic indicators could move the Federal Reserve closer to unwinding its massive stimulus program that has boosted commodities prices.
Brent held above $115 early on in the session as investors worried that supply disruptions could persist in the Middle East after a U.S. Senate panel on Wednesday supported a military strike on Syria.
Brent and U.S. crude finished higher after giving up some early gains following strong U.S. economic data on the service sector and employment data that suggested the world's biggest economy could be stable enough to withstand a winding down of stimulus by the Federal Reserve.
"We have to be careful that this really positive data isn't going to bring the Fed bears out," said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.
The Institute for Supply Management reported that the pace of growth in the U.S. services sector accelerated in August to its fastest in almost eight years, buoying the U.S. equities market and helping send the dollar to a seven-week high against the euro. A strong dollar makes oil more expensive for holders of other currencies.
"Even with the dollar being up, the strong demand seems to be trumping that," said Phil Flynn, an analyst with the Price Futures Group in Chicago, Illinois.
The payrolls processor Automatic Data Processing and Moody's Analytics said private employers added 176,000 jobs in August, while the Labor Department said jobless claims last week fell to a near five-year low.
U.S. crude prices also drew support from data showing U.S. crude stocks fell for the ninth consecutive week, dropping by 1.84 million barrels, including a 1.83-million-barrel draw at Cushing, Oklahoma, the delivery point for U.S. crude futures.
The rate at which refineries operated last week edged up 0.5 percentage point to 91.7 percent of capacity.
"The U.S. is making all this gasoline to export to Europe to make up for all the problems they're having there," said Flynn, referring to disruptions in Libya and other regions which supply crude oil to Europe.
Brent crude rose 35 cents to settle at $115.26 a barrel, after an earlier high of $115.55.
U.S. oil gained $1.14 to settle at $108.37 a barrel after earlier reaching $108.54.
Last week, Brent rallied to a six-month high of $117.34 and U.S. crude rallied to a two-year high of $112.24 on concerns about the possibility of a U.S.-led strike on Syria. Both contracts have retreated slightly as investors reassessed the timeline for such an attack, traders said.
The Senate Foreign Relations Committee on Wednesday voted in favor of a resolution that sets a 60-day limit on any engagement in Syria, with a possible 30-day extension, and bars the use of U.S. troops for ground combat. The authorization for a strike still faces significant resistance in Congress.
While Syria is not a big oil producer, markets are already struggling to cope with the loss of supplies from a region that pumps a third of the world's crude. Outages in the Middle East and Africa have surpassed 3 million barrels per day, or about 3.5 percent of global demand.
Libya's oil exports have shrunk to just over 10 percent of capacity from three out of a possible nine ports as armed groups have tightened their grip on oil facilities.
(Additional reporting by Lin Noueihed in London, Manash Goswami in Singapore; Editing by Jim Marshall, David Gregorio, Bob Burgdorfer and Carol Bishopric)