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UPDATE 6-U.S. oil rises $1 as market eyes Cushing draw

* North Sea buzzard field restarted, Libya loading resumes

* Cushing stocks expected to fall by over 1 mln bbls -sources

* Coming up: API oil inventory data at 4:30 p.m. (2130 GMT

(New throughout, adds analysts' quotes, updates prices, changes byline/dateline pvs LONDON)

NEW YORK, Feb 4 (Reuters) - U.S. crude oil rose by more than $1 per barrel on Tuesday, reversing the previous session's losses, as traders expected data to show oil inventories were beginning to drain in earnest from the benchmark's delivery point at Cushing, Oklahoma, after the start-up of TransCanada's Keystone south pipeline.

Oil stocks at Cushing were expected to have dropped by more than 1 million barrels for the first time in five months, narrowing the closely-watched and heavily-traded spread between Brent and West Texas Intermediate.

Traders have anticipated declining stocks at Cushing, indicating demand for that oil, since Keystone announced late last month its pipeline went into service. The spread was last trading at $8.52 per barrel, after narrowing to $8.06 on Monday, its smallest since Oct. 18. It has narrowed by some $7 since mid-January.

Data released later on Tuesday will show how much oil has drained from the storage hub.

"The primary push behind today is that the Brent-WTI spread is narrowing on the idea that the Cushing oil is making it to the refineries and we think they have a bid for it," Gene McGillian, energy analyst with Tradition Energy in Stamford, Connecticut.

A stronger U.S. equities market also provided support.

U.S. crude oil futures were up $1.02 to $97.45 per barrel by 11:15 a.m. EST (1615 GMT), bouncing after their largest daily percentage loss in nearly a month on Monday as they tumbled with U.S. equities.

Brent rose and fell in a narrow range, pressured by concerns that weak data from the United States and China, the world's largest consumers of oil, could slow global growth, although supply problems offered some support.

Brent oil was last trading 12 cents lower at $105.92 a barrel.

Brent drew some support from tighter supply in the North Sea after an output glitch at the 200,000 barrels-per-day Buzzard, the largest field that contributes to Forties. The field has restarted and will return to normal levels in days, its operator said.

Bad weather also supported prices as it reduced output from Libya on Monday but the National Oil Corporation said loading had restarted and production would return to normal on Tuesday.

Traders also awaited the release of oil inventory data from the American Petroleum Institute on Tuesday at 4:30 p.m. EST and from the U.S. Energy Information Administration at 10:30 a.m. EST on Wednesday.

U.S. commercial crude oil and gasoline stockpiles were forecast to have risen last week, a preliminary Reuters poll of analysts showed on Monday.

The market anticipated a large draw in distillates after frigid weather in the last week drove up heating oil demand across the U.S.

"TransCanada's Keystone pipeline has drained at Cushing, but the heating oil is going to be the leader tomorrow when it comes to the data due to the weather," said Bill Baruch, senior market strategist with iitrader.com in Chicago.

(Additional reporting by Lin Noueihed in London and Florence Tan in Singapore.; Editing by Jason Neely, Keiron Henderson and Marguerita Choy)

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