UPDATE 7-Oil rises on seasonal demand, geopolitical concerns

* Obama: "isolation will deepen" if Moscow continues course

* US crude stocks rise 6.6 mln bbl, at Cushing drop 1.3 mln

* Iran May exports above agreed level

* U.S. GDP, jobless data suggest improved economic outlook

(New throughout, updates prices, market activity, new byline, changes dateline, previously LONDON)

NEW YORK, March 27 (Reuters) - Crude oil futures rose on both sides of the Atlantic on Thursday, with U.S. crude up more than $1 to hit a three-week high as strong U.S. economic data and the end of refinery maintenance season signaled strong demand ahead for crude oil.

The U.S. economy grew a bit faster than previously estimated in the fourth quarter, data showed, while the number of Americans filing new claims for unemployment benefits unexpectedly fell last week and touched its lowest level in nearly four months.

U.S. crude's gains gave a lift to Brent, which also drew support from worries that possible Western sanctions on Russia's energy sector could disrupt global supplies.

"You've got seasonal demand spiced with a little bit of geopolitical headlines," said Stephen Schork, editor of The Schork Report, in Villanova, Pennsylvania.

The United States and the European Union agreed on Wednesday to work together on preparing possible further economic sanctions in response to Russia's actions in Ukraine and to make Europe less dependent on Russian gas.

Brent for May delivery was up 66 cents at $107.69 a barrel at 11:33 a.m. EDT (1533 GMT).

U.S. crude for May delivery was up $1.38 at $101.64 a barrel, following a $1.07 rise in the previous session. It was on track for its highest close in three weeks, up 2.1 percent for the week, and set for its biggest weekly gain in seven.

The spread between the two benchmarks narrowed to a low of $6.00 during the session, its tightest since March 7, down from $6.77 at Wednesday's close.

U.S. crude, or West Texas Intermediate (WTI), continued its upward trend following Wednesday's data showing a further drain in oil inventories at the Cushing, Oklahoma delivery point for the NYMEX contract, which hit their lowest level since January 2012.

That oil is piling up along the U.S. Gulf Coast, home to nearly half of the nation's refinery capacity, where maintenance season is coming to its close and refineries are preparing to churn out summer-grade gasoline.

"We know runs are about to increase significantly," said Andy Lebow, vice president at Jefferies Bache in New York.

Low supply out of Libya and Nigeria lent further support to Brent. Oil theft is likely to push Nigeria off its spot as top African crude oil exporter in May, when exports could fall to their lowest since records began in 2009.

In Britain, Murphy Oil was preparing to exit British refining next month with the sale of its Milford Haven plant and retail assets to private equity fund Greybull Capital for over $500 million, sources close to the talks told Reuters.

(Additional reporting by Simon Falush in London, Jacob Gronholt-Pedersen in Singapore; editing by Jane Baird, William Hardy and David Gregorio)