* U.S. crude stocks fall, but rise at Cushing hub
* Brent premium to U.S. crude hits highest since early
(Adds euro zone data, Brent premium over U.S. crude, updates
By Simon Falush
LONDON, Jan 9 Oil rose towards $108 a barrel on
Thursday, as caution prevailed on prospects for a solution to
Libya's oil exports deadlock.
Brent crude for February delivery was 69 cents
higher at $107.84 per barrel at 1047 GMT, after settling 20
cents lower the day before.
Brent prices fell as much as $6 per barrel last week, after
Libya said it would restart its key El Sharara oil field.
It is now producing around 650,000 barrels per day (bpd) of
oil, of which 510,000 bpd is being exported, Oil Minister
Abdelbari Arusi told Reuters on Wednesday.
This is well up from a trough below 100,000 barrels per day
late last year but still around half of exports before protests
paralysed the sector.
Analysts said expectations that exports would quickly surge
back towards the 1.4 million barrels per day before strikes at
oilfields began last July had evaporated due to escalating
tensions between the Tripoli government and an armed grouping
controlling three eastern oil ports.
"The market was too optimistic about developments in Libya
and it's clear that the conflict is far from resolved and it's
not going in the right direction," said Bjarne Schieldrop, chief
commodity analyst at SEB in Oslo.
Libya said on Wednesday it will stop doing business with,
and take to court, any foreign firms trying to buy oil from
eastern ports seized by armed protesters.
The statement came after tension built this week with rebels
inviting foreign firms to buy crude from them and the Libyan
navy firing warning shots near a tanker it said was trying to
load oil illegally.
U.S. oil was up 43 cents at $92.76. The contract shed
$1.34 to end at a six-week low on Wednesday as a large build in
crude stockpiles at the contract's delivery point in Cushing,
Oklahoma, weighed on the market.
The worries about Libya and building U.S. stocks helped to
push Brent to its highest premium to U.S. crude since early
December, above $15 per barrel CL-LCO1=R.
While the Cushing stocks rose, total U.S. crude stocks fell
by 2.7 million barrels in the week to Jan. 3, data from the U.S.
Energy Information Administration (EIA) showed.
Overall U.S. crude inventories fell for the sixth straight
week, totalling 33.5 million barrels for the period, the largest
six-week drop since October 1990.
Still, the commercial stocks remain near historical highs
due to growing U.S. oil output.
Stronger than expected euro zone economic morale data, which
reached its highest in 29 months, also helped to push demand
sensitive assets like oil higher.
Investors will look to U.S. non-farm payrolls on Friday for
signs of continued recovery in the world's largest economy,
which may bolster speculation over imminent cuts in the Federal
Reserve's commodity-friendly stimulus programme.
(Additional reporting by Jacob Gronholt-Pedersen in Singapore;
editing by William Hardy and Keiron Henderson)