UPDATE 8-Brent falls, U.S. crude gains as spread trade unwinds
* Q3 GDP revised up more than expected, jobless claims fall
* Lower U.S. crude stocks support U.S. oil
* OPEC keeps production target unchanged (Updates prices to settlement)
NEW YORK, Dec 5 (Reuters) - Brent crude oil futures fell and U.S. crude oil futures gained for a fifth straight session on Thursday, narrowing the gap between the two benchmarks to a two-week low as positive U.S. economic data hinted at a resurgence of demand for oil in the world's largest consumer.
Traders said gains in the U.S. benchmark were limited by concern over whether the positive U.S. data would prompt the Federal Reserve to start curbing its monthly bond-buying program, which could reduce support for riskier assets such as commodities.
Brent crude fell by over $1 at one point during the session, following a month of consistent gains that saw prices rise from $103 in early November to above $113 on Wednesday.
"The market's run basically straight up from the 7th of November and now it's taking a pause," said Rich Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.
During that month, Brent's premium over U.S. crude CL-LCO1=R widened from below $9 to over $19.
That spread has unwound over the past week, as U.S. crude, or West Texas Intermediate (WTI) has consistently outperformed Brent, knocking more than $5 off the spread and bringing it to a session low of $12.97 per barrel on Thursday.
Brent crude oil for January delivery fell 90 cents to settle at $110.98 a barrel.
U.S. crude rose 18 cents to settle at $97.38 a barrel, after rising more than 5 percent over the past four sessions, putting the U.S. benchmark on course for its largest weekly gain since July.
Brent's premium over U.S. crude stood at $13.60, down nearly $6 from $19.41 reached as recently as Nov. 27.
"Brent is down because we're unwinding that spread, long Brent, short WTI," said Phil Flynn, an energy analyst with the Price Futures Group in Chicago.
U.S. gross domestic product grew at a revised 3.6 percent annual rate, up from a 2.8 percent pace reported earlier and above the 3.0 percent expected by economists polled by Reuters.
Initial claims for state unemployment benefits fell by 23,000 to a seasonally adjusted 298,000, declining for a third straight week.
"We seem not to be able to build any upside momentum in U.S. crude despite some pretty impressive economic releases today, but that's probably down to the fact that good news on the economy equates to bad news on the quantitative easing front," said Addison Armstrong, senior director of market research at Tradition Energy in Stamford, Connecticut.
Figures from the U.S. Energy Information Administration released Wednesday showed crude inventories fell by 5.6 million barrels in the week to Nov. 29, cutting around one-sixth of the 36 million barrels that had built up over the previous 10 weeks.
The EIA data also showed distillate production rose last week to an all-time high of 5.1 million barrels a day.
Crude oil production in the United States dipped slightly last week but held above 8 million barrels per day, the data showed.
Flynn noted that an improving economy and high oil production in the United States could make the oil market less dependent on the Fed's monetary policy and more responsive to the needs of the real economy.
"Now the fundamentals are at least making the oil move a little more independently," he said.
Traders were also eyeing hurricane-force winds in the North Sea that threatened to disrupt oil supplies from the region. So far only one small oil platform has been shut.
The Organization of the Petroleum Exporting Countries agreed on Wednesday to keep its production target unchanged at 30 million barrels per day for the first half of 2014.
Expectations of higher output from some OPEC members in coming months and a continued increase from supplies in North America have left some traders questioning whether the producer group will need to curb output in the second half of 2014. (Additional reporting by Joshua Franklin in London and Jacob Gronholt-Pedersen in Singapore; Editing by James Dalgleish, Chris Reese and Alden Bentley)