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UPDATE 3-Oil stays above $110 on Ukraine, supply worries

* Brent, U.S. crude still near 2-1/2-week highs

* OPEC needs to pump more in second half of 2014 - IEA

* U.S. inventories rise as Cushing stocks drop - EIA

* Libya's El Feel oilfield resumes production

* Coming up: U.S. Philly Fed Index, other data at 1400 GMT

(Updates throughout, changes dateline, previous SINGAPORE)

LONDON, May 15 (Reuters) - Brent crude stayed above $110 a barrel on Thursday, near a two-and-a-half-week high, bolstered by concerns over the crisis in Ukraine and evidence of a tightening global oil market.

The exclusion of pro-Moscow separatists from talks among Ukraine's interim leaders on plans to give the eastern regions greater autonomy cast doubt over moves to defuse the political crisis in Central Europe.

Energy ministers from Russia and the European Union are due to meet on May 19 to agree another round of talks with Ukraine to end a dispute over gas prices and avoid a potential interruption of energy supplies.

Investors are worried that gas flows, or even oil supplies, from Russia could be curtailed this summer. Half of Europe's imports of Russian natural gas go through Ukraine.

The International Energy Agency said on Thursday OPEC oil producers needed to raise output significantly in the second half of 2014 to meet global demand as China builds its strategic reserves and stocks in industrialized countries remain low.

"Crude prices remain elevated and forecast balances call for a significant rise in OPEC production from current levels for the second half of the year," the West's energy watchdog said in its monthly Oil Market Report.

"While OPEC has more than enough capacity to deliver, it remains to be seen whether it will manage to overcome the above-ground hurdles that have plagued some of its member countries lately," the IEA report added.

Brent crude for June was down 15 cents at $110.04 a barrel by 0820 GMT. Wednesday's close at $110.19 was the highest settlement since April 24. The June contract expires on Thursday.

U.S. oil was down 45 cents at $101.92 a barrel after closing 67 cents higher at $102.37, its highest finish since April 21.

Prices were helped higher by weekly data from the U.S. Energy Information Administration showing stocks at the key Cushing, Oklahoma, delivery hub fell by 592,000 barrels in the week to May 9.

Overall U.S. crude inventories rose 947,000 barrels to 398.5 million barrels last week, as production hit a 28-year high of 8.43 million barrels, the EIA said on Wednesday. Analysts had expected U.S. crude inventories to fall by 100,000 barrels.

Production at Libya's El Feel oilfield has restarted, the National Oil Corp (NOC) said on Wednesday, but supply from the 340,000-barrels-per-day El Sharara oilfield remained halted because protesters had yet to open the pipeline to Zawiya port.

Meanwhile, Iran and six world powers started three days of talks in Vienna on Wednesday aimed at drafting an agreement for Tehran to curb its nuclear program in exchange for a phased end to the sanctions that have halved its oil exports over the last two years.

OPEC countries could reduce their own oil output to make room for production from Iran's oilfields, Iran's oil minister said on Wednesday.

The current price for crude was fair, he said.

(Editing by Dale Hudson)