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UPDATE 6-Brent above $109, WTI rises $1 after US oil stock data

* U.S. crude inventories fell 3.4 mln bbls last week-EIA

* Cushing stocks down 321,000 barrels - EIA

* Libya's Hariga oil port stays closed - AGOCO

* ECB to launch monetary policies to lift euro zone growth

(Recasts, updates prices, adds EIA data)

LONDON, June 4 (Reuters) - Brent crude rose above $109 a barrel on Wednesday and U.S. crude jumped by $1 a barrel following a sharper-than-expected drop in U.S. oil inventories.

The U.S. Energy Information Administration (EIA) said U.S. crude stocks fell by 3.4 million barrels last week due to a large drop in imports, surpassing both forecasts for a 300,000 barrel draw and the drop reported by an industry group on Tuesday.

Crude stocks at Cushing, Oklahoma, delivery point of the U.S. crude oil contract, also fell, declining 321,000 barrels, while nationally imports were off by 686,000 barrels per day (bpd) to just 7.05 million bpd.

Gasoline and distillate stocks both rose, helping to cap gains.

Brent oil for July delivery was up 40 cents at $109.22 a barrel by 1433 GMT, after settling down 1 cent the previous day.

U.S. crude, or West Texas Intermediate (WTI), for July delivery gained 89 cents to $103.55 a barrel, and briefly jumped to a day high of $103.69 immediately after the EIA data.

Its discount to Brent narrowed to as little as $5.69 on Tuesday, the smallest since mid-April.

Brent on Tuesday fell close to its 100-day moving average around $108.30, a technical indicator watched by traders, but held the support level before recovering. It has traded in a narrow range of less than $10 a barrel so far in 2014.

Oil prices have stabilized this week after slipping 1-1.5 percent in the last week of May as traders booked profits on an expected rise in OPEC supply to the highest in three months in May.

Also providing support, the European Central Bank will meet on Thursday to discuss measures aimed at stimulating the economy after inflation in the 18-country currency area hit record lows in May.

LIBYA AND UKRAINE

Tension between Russia and Western powers over Ukraine and the political turmoil in Libya that has curbed the OPEC member's crude output have been underpinning oil prices.

U.S. President Barack Obama unveiled plans to spend up to $1 billion to beef up military support for eastern European members of the NATO alliance while fighting raged in eastern Ukraine for a second day.

In Libya, the eastern Hariga oil port remained closed on Wednesday even though protesting security guards had been paid their salaries, state oil firm AGOCO said.

"There are a lot of impediments to any return to full production in Libya," said Michael McCarthy, chief strategist at CMC Markets in Sydney.

"It's not just the disruption to operations, but also issues around control of ports. These problems are a part of a larger political issue in Libya and a resolution appears to be a long way away," he said.

Traders are also watching the results of wage talks between oil companies and the largest union in Norway, after a fourth round of negotiations failed. Two years ago about 10 percent of Norway's offshore workers went on strike for 16 days, cutting oil output by 13 percent and gas by 4 percent.

(Additional reporting by Florence Tan in Singapore; Editing by Dale Hudson and Susan Thomas)