* Cushing crude stocks fall 1.5 mln barrels, U.S. total gains - API
* Gasoline stocks fall 1.4 mln barrels, vs forecast for rise
* Libya standoff, Premier refuses to yield to successor
* Ukraine eyed; East Ukraine city calm after battle
(Rewrites throughout, previous dateline SINGAPORE)
LONDON, May 29 (Reuters) - Brent crude rose back above $110 a barrel on Thursday on signs of stronger demand from top oil consumer the United States, with a sharp drop in its gasoline stocks adding to recent data showing a strengthening economy.
The brighter demand outlook underpinned prices already boosted by concerns about the loss of most supply from Libya and a widening rift between the West and Russia, the world's second largest oil exporter, over Ukraine.
Still, some investors looking at price charts saw the market as prone to a correction as it has risen close to the top of the narrow price band it has traded in for much of this year.
Brent crude traded up 23 cents at $110.04 a barrel by 0759 GMT, after losing 21 cents on Wednesday.
U.S. crude oil gained 10 cents to $102.82, after ending Wednesday down $1.39 as traders booked profits ahead of a government report that is expected to show a build in overall crude stocks.
"Fundamentals haven't changed drastically, we know there are still issues in Libya and Ukraine," said Ken Hasegawa, a commodity sales manager at Newedge Japan.
The U.S. benchmark fell more sharply than Brent overnight because it failed to breach key resistance at $105 a barrel, Hasegawa said.
Brent has recovered nearly 3 percent from a low of $106.85 touched on May 1, while the U.S. benchmark has gained more than 4 percent over the same period.
Crude stocks in Cushing, Oklahoma, the delivery point for the U.S. benchmark, fell by 1.5 million barrels, data from industry group the American Petroleum Institute showed.
But overall inventories rose by 3.5 million barrels in the week to May 23 to 383.9 million, compared with analysts' expectations for an increase of 483,000 barrels.
In addition, gasoline stocks fell by 1.4 million barrels, compared to expectations for a 283,000-barrel gain.
Oil traders waited for the more closely-watched data from the U.S. government's Energy Information Administration (EIA) due 1500 GMT.
In Libya, acting prime minister, Abdullah Al-Thinni, refused to hand over power to a newly elected premier after questioning his legitimacy in a deepening confrontation among the OPEC nation's rival factions.
Oil traders also watched the situation in Ukraine, where relative calm returned to the streets of Donetsk after the biggest battle of the pro-Russian separatist uprising in eastern Ukraine.
(Additional reporting by Manash Goswami in Singapore, editing by William Hardy)