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UPDATE 6-Crude oil prices rise, gasoline leads, U.S. data supports

Jeanine Prezioso
Thursday, 21 Nov 2013 | 12:26 PM ET

* Major powers resume talks on Iran nuclear programme

* Fed minutes show taper may happen in next few meetings

* U.S. manufacturing index at highest since March

(Recasts to lead with gasoline, adds analyst's quote, updates prices, changes dateline, pvs LONDON)

NEW YORK, Nov 21 (Reuters) - Crude oil futures rose by more than $1 per barrel on Thursday, boosted by positive U.S. economic data and surging gasoline prices as demand was expected to rise.

Investors were also eyeing talks between Western powers and Iran on hopes of an accord over its nuclear program.

U.S. gasoline prices rose close to 2 percent, boosting the entire crude oil complex. Rising demand met with refinery outages in Europe and the United States, tightening supplies.

"This is a refinery capacity situation that is further challenged as we come into a very strong demand period," said Stephen Schork, editor of the Schork Report in Villanova, Pennsylvania.

Brent crude rose $1.11 to $109.17 a barrel by 11:44 a.m. EST (1644 GMT), after hitting a high of $109.30. U.S. oil rose $1.42 to $95.27 a barrel, after reaching a high of $95.35.

U.S. gasoline futures were up 1.9 percent, or by more than 5 cents a gallon, to $2.7137. The January/February gasoline contracts were backwardated, meaning front-month prices rose higher than the months further out, indicating tight supplies.

Refinery outages in the United States supported prices. In Europe, the gasoline-making unit at Total's 360,000-barrel per day (bpd) refinery in Antwerp, Belgium, was offline after an explosion on Tuesday that killed two.

Gasoline stocks at Europe's Amsterdam-Rotterdam-Antwerp hub dropped 28.2 percent from last week to their the lowest level this year.

Rising prices on both sides of the Atlantic narrowed Brent's premium over U.S. crude oil <CL-LCO1=R> by as much as 65 cents to $13.56 per barrel. The spread was last trading at $13.90.

The U.S. Department of Labor said that number of Americans filing new claims for unemployment benefits fell more than expected last week while U.S. Manufacturing Purchasing Managers Index rose to highest level since March, suggesting a strengthening economy.

Investors were waiting to see U.S. data to gauge the health of the U.S. economy and for hints on whether the U.S. Federal Reserve (Fed) will scale back its economic stimulus after talk of tapering resurfaced this week. Any sign of a pullback in policy would cut oil demand and weigh on prices.

"The manufacturing data feeds into the Fed's thinking but if they set themselves a threshold of 6.5 percent unemployment to be reached before an eventual taper takes place, that's what you have to be looking for," Harry Tchilinguirian, head of commodity market strategy at BNP Paribas said.

In Geneva, France and Iran traded tough words on Thursday as major powers struggled to finalise an interim deal to curb Tehran's nuclear program in exchange for sanctions relief, with Paris urging the West to remain firm and Tehran deploring a loss of trust.

Sanctions against Iran have kept 1 million barrels of oil from the market, and any indication that an agreement would be reached could mean lower prices as Iranian oil supplies would become available.

Lower distillate stocks in the U.S. were also helping to support Brent after the front-month gas oil futures in London flipped into backwardation, according to Christopher Bellew, analyst at Jefferies Bache brokerage in London said.

The December/January gas oil spread <LGOZ3-F4> flipped into a slight backwardation, following U.S. government data that showed low heating oil stocks in the United States, which traders expect will mean greater refining demand.

(Additional reporting by Joshua Franklin and Julia Payne in London and Manash Goswami in Singapore; Editing by Dale Hudson, David Evans and Marguerita Choy)