UPDATE 7-U.S. crude oil rises on sharp uptick in gas demand

* U.S. gasoline stocks fall 5.2 mln barrels, over 7 times forecast -EIA

* Weaker U.S. dollar boosts oil buying

* Russia seeks to reassure West, Ukraine over troops

* Libya not in full control of re-opened eastern port

(Recasts throughout with updated prices, analyst comment, changes byline, dateline, previous LONDON)

NEW YORK, April 9 (Reuters) - Brent crude rose on Wednesday as rising tensions between Russia and Ukraine made investors skittish again, while U.S. crude rose on much higher than expected gasoline demand.

While the Ukraine crisis may not directly impact global oil supplies and trade, the risk premium on oil is rising as investors worry the Kremlin's standoff with the West could quickly take a turn for the worse.

Assistant U.S. Secretary of State Victoria Nuland said on Wednesday that Washington has no doubt that Russians were behind the takeovers of government buildings in eastern Ukraine this week.

Meanwhile, Moscow called concerns from the West over the presence of Russian troops near the border of Ukraine "groundless", saying they posed no threat.

U.S. crude oil stocks rose more than expected last week, but the build was overshadowed by a sharp spike in gasoline demand, according to U.S. Energy Information Administration data.

Gasoline stocks fell by 5.2 million barrels, dwarfing the 729,000-barrel-draw that was expected. Analysts were especially surprised by the fall since it came before the start of the summer driving season, when demand usually spikes.

"Gasoline is going to push the market higher and bring U.S. crude up with it," said Joseph Posillico, senior vice president of energy derivatives at Jefferies Bache in New York.

U.S. RBOB gasoline rose by 1.5 cents after the EIA data was released, and was last trading 2.25 cents higher at $3.0029 per gallon at 12:34 p.m. EDT (1634 GMT).

Following RBOB's rally, U.S. oil rose 43 cents to $102.99 a barrel. Brent crude rose 25 cents to $107.92 a barrel.

A weaker U.S. dollar also helped prop up global oil prices as commodities priced in the greenback are cheaper when the dollar is worth less.

Brent prices were not bothered by the potential for a rebound in Libyan oil exports as the country's oil protection force said it has not regained full control of the Zueitina port. The government had announced a deal with rebels to end the blockade of eastern oil terminals earlier this week.

The port, along with the country's two largest, Es Sider and Ras Lanuf, has been under the control of an eastern federalist group led by former guard member Ibrahim al-Jathran, who recruited men from within his ranks.

U.S. crude inventories rose by 4 million barrels in the week to April 4, data from the Energy Information Administration (EIA) showed, compared with analysts' expectations for an increase of 1.3 million barrels.

But analysts were focused on the steeper-than-expected fall in gasoline stocks, which they said added to evidence of a broad economic recovery and robust demand as summer driving season gets started.

"The gasoline demand is jaw dropping. Here we are in the first week of April and gasoline demand is pretty strong," said Carl Larry of consultancy Oil Outlooks.

"The more jobs we've seen created, the more people back to work has really driven gasoline demand back up."

(Additional reporting by Peg Mackey in London and Manash Goswami in Singapore; Editing by Jane Baird, David Evans and Tom Brown)