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UPDATE 6-Oil rises after U.S. data shows 4th weekly inventory draw

Anna Louie Sussman
Friday, 27 Dec 2013 | 1:56 PM ET

* U.S. crude oil tops $100 for first time in 2 months

* Steep declines in US crude and product inventories -EIA

* Strikes end at French refineries

(Rewrites throughout, updates prices, changes byline, dateline, pvs LONDON)

NEW YORK, Dec 27 (Reuters) - U.S. crude oil futures rose by more than $1 per barrel on Friday after government data showed U.S. oil inventories fell for the fourth straight week while Brent was supported by civil unrest in Africa that has cut off supplies.

Brent's gains were capped as traders sold contracts to unwind the spread between the European benchmark and its American counterpart.

Brent's gains were checked after government forces said they had defeated South Sudanese rebels in Malakal, the capital of the country's major oil producing Upper Nile state, after four days of intense fighting.

Escalating violence in South Sudan had threatened to reduce its crude output further, adding to supply outages in Libya, where production is running at a mere 250,000 barrels per day (bpd).

Prices were supported by U.S. government data that showed crude oil stocks in the U.S. fell by 4.7 million barrels in the week ended Dec. 20, double the forecast of a 2.3 million draw.

Brent rose 33 cents to $112.31 by 1:34 p.m. EST (1834 GMT). U.S. crude gained 96 cents to trade at $100.51, after touching a high of $100.75.

The spread between the two benchmarks narrowed by close to $1 per barrel at one point to $11.45. It was last trading at $11.77.

U.S. gasoline futures prices were tempered by the news that workers at Total's last striking refinery in France ended their two-week walkout, easing concern over product tightness.

U.S. oil futures broke above the $100 mark for the first time since Oct. 21, initially on a technical move. Traders bought contracts to unwind positions on ensuing momentum after the February contract broke above the 100-day moving average in the previous session, some analysts said.

West Texas Intermediate, the grade of crude that underpins the U.S. oil futures contract, then continued its rise after the government reported a fourth straight weekly decline in oil inventories.

Refineries ran at high capacity to meet demand for refined oil products, which rose 5.3 percent from a year ago, indicating increased demand for U.S. oil. Distillate stocks, which include heating oil and diesel, fell close to four times the market forecast as the U.S. continues to export refined fuels to Europe and Latin America.

"There's strong demand here from the refining sector and the annual destocking is giving the market some support," said John Kilduff, a partner at Again Capital LLC.

"The demand numbers were supportive yet again from the products side."

Oil output in South Sudan had fallen by nearly a fifth to 200,000 barrels per day after the Unity state oilfields shut earlier this week due to fighting.

In Libya, a mix of militias, tribesmen and political minorities, demanding a greater share of the country's oil wealth and more political power, have shut most oilfields and ports, cutting oil output to 250,000 bpd from 1.4 million bpd in July.

(Additional reporting by Peg Mackey in London, Florence Tan in Singapore; Editing by 'Andrew Hay)