UPDATE 8-U.S. oil rises on surprise inventory drop, pulls Brent higher

* U.S. crude stocks fell 1.8 mln barrels last week - EIA

* Cushing stocks down 1.4 million barrels - EIA

* Putin calls for separatists to postpone referendum

* Libyan rebels occupying ports refuse to deal with new PM

(Rewrites, updates prices, adds analyst comment, changes byline, dateline, previous LONDON)

NEW YORK, May 7 (Reuters) - U.S. crude oil prices rose by more than $1 a barrel on Wednesday after a government report showed an unexpected sharp drop in inventories in the United States.

Brent crude rose gradually over the session, taking support the strength in U.S. oil prices, as well as tensions in Libya where rebels continue to delay the government's plan for more oil exports.

The U.S. Energy Information Administration said U.S. crude inventories fell 1.8 million barrels last week, compared with analyst' forecasts for a 1.4-million-barrel build. Stocks fell 1.4 million barrels at the Cushing, Oklahoma, delivery point of the U.S. futures contract, to their lowest since 2008.

U.S. crude rose $1.18 to $100.68 a barrel by 12:57 p.m. EDT (1657 GMT), with its discount to Brent <CL-LCO1=R> narrowing about 40 cents to $7.11 a barrel. Brent crude for June delivery rose 74 cents to $107.80 a barrel.

"That Cushing number is very bullish," said Carl Larry, chief executive of consultancy Oil Outlooks. "We're at that turning point where we're out of maintenance and coming back to refinery production. These are underlying bullish factors."

Libyan rebels occupying oil ports in the east of the country said they would not deal with new Prime Minister Ahmed Maiteeq, despite an agreement last month to reopen four ports.

Protests at Libya's major oilfields and ports have decimated its oil production to just over 250,000 barrels per day from around 1.4 million bpd in mid-2013 and slowed exports to a trickle.

Brent was pressured after Russian President Vladimir Putin said he was ready to discuss a way out of the Ukrainian crisis and called on separatists in east Ukraine to postpone a May 11 referendum on the status of the mostly Russian-speaking region.

He spoke after talks with the head of the Organization for Security and Cooperation in Europe, who said the security and rights body would soon propose a "road map" to defuse the crisis.

While gas and oil supplies have not been significantly disrupted by the Ukraine situation, traders and analysts say the risk remains that the United States and European Union could target the Russian energy industry with sanctions, or Moscow could choose to restrict exports.

European governments reached a preliminary agreement that would make it easier for the EU to target Russian companies with sanctions as a method of pressuring Russia over Ukraine.

Unrest also hit oil infrastructure in Yemen where assailants blew up its main oil export pipeline, halting crude flows.

(Additional reporting by Robert Gibbons and Anna Louie Sussman in New York, David Sheppard and Julia Fioretti in London, and Jacob Gronholt-Pedersen in Singapore; Editing by William Hardy and Marguerita Choy)