* US distillate stocks drop 3.21 mln bbls on sustained cold -EIA
* Brent to revisit high of $108.33 -technicals
(Updates price, adds detail, quote, changes dateline from SINGAPORE)
LONDON, Jan 24 (Reuters) - Global oil prices held above $107 a barrel on Friday, as bitter cold in the United States sapped stockpiles of crude and distillates in the world's largest consumer of oil.
Distillate stocks have plunged three-and-a-half times more than expected, driving U.S. heating oil futures to their highest level this year and helping the U.S. crude benchmark toward its biggest weekly rise since Dec. 6.
Brent crude fell 20 cents to $107.38 a barrel by 0903 GMT, but was on course to end the week at its highest since Dec. 20.
Brent, the international benchmark, ended 69 cents lower in the previous session after weak factory activity data from China, the world's second-largest oil consumer.
U.S. oil, or WTI, increased 21 cents to $97.53, extending gains after settling 59 cents higher.
"The U.S. benchmark is drawing support from the fall in heating oil stocks as a result of the severe winter," said Tetsu Emori, a commodities fund manager at Astmax Investment.
"It may be helping Brent as European refiners export heating oil to the United States, to the East Coast."
Refiners in Asia, Europe and Russia are shipping around half a million tonnes of heating oil and diesel to the United States this month, with at least a dozen tankers booked so far in January to ship gasoil and diesel to the U.S. East Coast, according to traders and shipping data.
U.S. distillate stocks fell 3.21 million barrels in the week ended Jan. 17, the Energy Information Administration (EIA) said, compared with analysts' expectations of a 900,000-barrel draw. Distillate demand over the past four weeks rose 5.2 percent from a year earlier to 3.46 million barrels.
"Distillates stocks decreased by more than expected, with stocks remaining below the bottom of the five-year range," analysts at BNP Paribas said in a note.
A monthly report from industry group American Petroleum Institute (API) also showed a rise in U.S. petroleum product demand, reflecting a continued improvement in domestic manufacturing and the broader economy.
Demand in December rose 5.8 percent year-on-year to 19.2 million barrels per day (bpd), the API said. Demand for gasoline rose 4.5 percent to 8.8 million barrels while gasoline production hit a record for that month at 9.4 million bpd and was just 66,000 bpd below an all-time high.
The rally in U.S. oil has seen the spread between Brent and WTI, a popular trade for speculators last year, narrow to below $10 for the first time in months.
The spread touched $9.83 on Friday, its lowest since Oct. 28, a change analysts have attributed to the opening of a pipeline from the bloated Cushing crude oil storage hub to a cluster of refiners on the U.S. Gulf Coast.
The line is a major step toward easing the gap between depressed inland U.S. crude oil and much higher global prices paid on the coast.
"We will look for some stability at current levels while we also feel that the next $2 move is apt to show a narrowing rather than an expansion," Jefferies Bache analysts said in a note to clients.
"We still feel that nearby Brent will have difficulty maintaining value north of the $108 level."
(Additional reporting by Manash Goswami in Singapore; Editing by Dale Hudson and Muralikumar Anantharaman)