UPDATE 3-Brent hovers near $109 on China data, Libya worries
* Strong Chinese manufacturing data boosts oil
* Libyan outages, Iraq unrest provide further support
LONDON, Nov 1 (Reuters) - Brent crude oil held around $109 a barrel on Friday after stronger-than-expected manufacturing data from China boosted the outlook for demand, while a lingering oil crisis in Libya supported supply worries.
China's manufacturing sector grew at the fastest pace in 18 months in October, official data showed, adding to signs of economic stabilisation in the world's second-largest oil consumer.
Brent oil is set to gain more than $1 this week as Libya struggles to ramp up exports and unrest in fellow OPEC member Iraq worsens.
Brent crude for December delivery rose as high as $109.41 a barrel but was trading 4 cents higher at $108.88 at 1000 GMT. Brent settled down $1.02 in the previous session.
U.S. oil for December rose 6 cents to $96.44 but was poised to fall for the fourth straight week, its longest losing streak since June 2012.
"Concerns over Libyan exports are the main reason why Brent is so strong at the moment," said Christopher Bellew, an oil broker at Jefferies Bache in London.
"In the near term, we're likely to see Brent trading within a range of $108.50 to $110 a barrel."
Brent's premium over U.S. crude oil has risen by nearly $5 over the past five sessions and was near $12.40.
International benchmark Brent is more susceptible to global supply constraints, while landlocked U.S. oil has been pressured by healthy inventory data from the U.S. Energy Information Administration (EIA).
Bellew said that a spread of roughly $12 between the two benchmarks could persist for several months.
Oil traders were also watching for signs of a thaw in relations between the West and Iran, ahead of talks aimed at ending a standoff over Tehran's disputed nuclear programme.
Years of Western sanctions have slashed Iranian oil exports and buoyed global oil prices, and any relaxation in the sanctions regime would pressure Brent.
Months of disruptions have cost the Libyan government billions of dollars in lost oil revenues and renewed supply worries, helping push Brent to a high of $112 a barrel in October.
Exports from Libya have fallen to around 10 percent of its capacity of 1.25 million bpd.
While the EIA says global spare capacity rose slightly in September and October, prolonged disruption in Libyan supplies and concern over unrest in Iraq mean the oil industry is reliant on top exporter Saudi Arabia making up for missing oil.
Spare capacity, or the amount of oil that global producers can quickly bring online without major investment, averaged 1.8 million bpd in September and October, some 200,000 bpd higher than in the previous two months, the U.S. government agency said.