(Corrects location of Come By Chance refinery in paragraph 13 to Newfoundland, from New Brunswick)
* Libyan armed forces warn oil tankers away from seized ports
* Freezing weather threatens to curtail U.S. oil production
* U.S. crude inventories expected to rise in weekly reports
By Elizabeth Dilts
NEW YORK, Jan 7 (Reuters) - Oil rose on Tuesday as new worries about Libyan output and fighting in Iraq helped prices rebound after five straight declines.
U.S. gasoline prices led gains, rising by 1.5 percent as the coldest weather in decades triggered a handful of refinery glitches that curtailed supply, while widespread freezing conditions fed heating fuel demand on the East Coast.
Libya's navy opened fire after a tanker approached to load crude at the seized port of Es Sider, dampening the prospect of a further output recovery after the restart of the major El Sharara oilfield had led to a drop in prices.
"The market is taking it with a grain of salt that (Libya) can come through this time," said Gene McGillian, an energy analyst with Tradition Energy in Stamford, Connecticut.
Brent crude rose 70 cents to $107.43 by 1:26 p.m. ET (1826 GMT), after settling lower in the previous five sessions, partly aided by a stronger dollar and higher equity markets. U.S. crude rose 46 cents to $93.89.
"It's equities that are trading higher that are helping the market hang in there," said Bill Baruch, senior market strategist at iitrader.com.
Production is building up at the 340,000-barrel-per-day (bpd) El Sharara, which on Tuesday is pumping 277,000 bpd. A return to full output will more than double Libyan production, which had fallen to 250,000 bpd from 1.4 million bpd in July.
Brent hit its lowest point since Nov. 20 on Monday, finding support just above that day's low of $106.51.
Violence in Iraq and the possibility of increased tensions ahead of parliamentary elections in April have also sparked concern about supply from one of the Middle East's largest oil producers.
The Iraqi army deployed tanks and artillery around Falluja on Tuesday, security officials said, as local leaders in the besieged city urged al Qaeda-linked militants to leave in order to avert an impending military assault.
Oil was also partly supported by severe cold weather in the central United States that threatens to curtail some oil production and disrupted refinery operations. U.S. RBOB gasoline futures rose 3.87 cents to $2.6847 a gallon.
Marathon Petroleum Corp said its 120,000-bpd Detroit refinery was experiencing technical difficulties because of the extreme cold. And industry group Genscape reported reduced activity at the gasoline-making fluid catalytic cracker of Marathon's 212,000 bpd Catlettsburg, Kentucky refinery.
The North Atlantic Come By Chance Refinery in Newfoundland, Canada, also remained offline because of a local outage, local media reported. And PBF Energy Inc's 160,000-barrel-per-day (bpd) refinery in Paulsboro, New Jersey, shut after a power outage, traders said on Tuesday.
The glitches were partly offset by expectations of significantly reduced demand for transport fuels.
"The cold weather isn't helping crude oil trade higher than people would think because there are so many cancellations with flights," Baruch said.
Temperatures were forecast to return to normal levels in Texas and North Dakota by Wednesday.
Later on Tuesday, attention will shift to weekly data expected to show that U.S. crude oil stockpiles fell for a sixth week, adding to a more than 30 million barrel decline over the past five weeks - the biggest such decline since 1990 - due to year-end tax avoidance. (Additional reporting by Alex Lawler in London and Jacob Gronholt-Pedersen in Singapore; Editing by William Hardy, David Gregorio and Paul Simao)