UPDATE 8-U.S. crude rises more than $2 on expiry, weather
* Cold winter in North America supports demand for diesel
* Libyan output slips, S.Sudan rebels say capture town
* Dollar near six-week low, supports commodities
* Coming up: API data on Wednesday at 4:30 p.m. EST (2130 GMT) (Adds analyst quote, details on expiration; updates prices)
By Anna Louie Sussman and Elizabeth Dilts
NEW YORK, Feb 18 (Reuters) - U.S. crude oil futures rose by over $2 a barrel on Tuesday to hit a fresh four-month high as high demand and cold weather drove gasoline and heating oil prices higher while traders eyed contract expirations later this week.
Brent crude oil rose to its highest level this year as Libyan output fell yet again, rebels in South Sudan seized control of the capital in a key oil-producing state and protests in Venezuela showed renewed instability.
"Geopolitics are back at the forefront and some of the longer-term shorts that have been hanging on have gotten out ahead of the expiration," said Dominick Chirichella, senior partner at Energy Management Institute in New York.
A report from industry intelligence provider Genscape said stocks at Cushing, Oklahoma, fell by 1.4 million barrels since last Tuesday, according to traders.
The U.S. dollar traded near a six-week low against a basket of currencies on Tuesday, which also offered support.
In New York, U.S. crude jumped $2.13, or 2.85 percent, to $102.43 per barrel, its highest since Oct. 10. There was no settlement on Monday as U.S. markets were shut for the Presidents Day holiday.
The March futures contract expires on Thursday.
Ultra-low sulfur diesel (ULSD), commonly referred to as heating fuel, rose 2.35 cents to settle at $3.1017 per gallon. U.S. RBOB gasoline rose more than 3 cents to end the day at $2.8368 per gallon.
Brent crude rose $1.28, or 1.17 percent, to settle at $110.46 per barrel, its highest settlement since Dec. 31.
Supporting Brent was another dip in Libyan production, which fell to just 375,000 barrels Tuesday, as protests disrupted flows from the key oilfield, El Sharara, the state oil company said. On Sunday, output was 390,000 bpd.
Supply concerns worsened on Tuesday following news that South Sudan has cut oil output by a fifth to 200,000 bpd, since rebels seized control of Malakal, the capital of the main oil-producing Upper Nile state.
Meanwhile, tens of thousands of protesters gathered in Venezuela's capital on Tuesday after security forces arrested an opposition leader on charges of that he had fomented unrest against the government.
In a potential sign Iran's oil exports were rebounding, Western powers and Tehran began "substantive" talks Tuesday aimed at a final settlement on the country's contested nuclear program. Diplomats cautioned, however, the deal may prove impossible.
Looking ahead to U.S. weekly petroleum stocks reports, analysts predicted distillate stocks, which include heating oil and diesel fuel, fell 1.8 million barrels on average in the week to Feb. 14 on continued cold weather, according to a Reuters poll.
Gasoline inventories were also seen as down by 900,000 barrels, while U.S. crude oil stocks were forecast to rise 1.8 million barrels on average, the poll found.
The American Petroleum Institute's weekly petroleum stocks report will be delayed by one day to Wednesday at 4:30 p.m. EST (2130 GMT).
The Energy Information Administration's report of crude oil, distillate and gasoline stocks will be released on Thursday at 11 a.m. EST. (Additional reporting by Alex Lawler in London, Florence Tan in Singapore; Editing by Mark Heinrich and Bernadette Baum)