* Atlantic oil market over-supplied, traders and analysts
* U.S. oil production rise more than offsets supply losses
* Fire hits BP's largest U.S. refinery, at Whiting, Indiana
* Hope fades for Ukraine-Russia ceasefire deal
(Updates prices to settlement; changes byline, dateline, pvs
By Anna Louie Sussman
NEW YORK, Aug 28 Brent crude oil fell and U.S.
crude rose as ample global supply and lackluster demand
pressured the global benchmark while positive U.S. economic data
supported oil prices in the world's largest oil consumer.
U.S. gross domestic product expanded at a 4.2 percent annual
rate instead of the previously reported 4.0 percent pace, the
Commerce Department said on Thursday, reflecting upward
revisions to business spending and exports.
Separate reports showed a second consecutive week of
declines in the number of Americans filing new claims for
unemployment benefits and a jump in home purchase contracts.
"There's better demand here in the U.S. than versus Europe,"
said Phil Flynn, an analyst with the Price Futures Group in
Oil supply is expected to exceed demand this year, analysts
forecast, and crude oil benchmarks on both sides of the Atlantic
Basin are on track to post a second monthly decline.
October Brent crude fell by 26 cents to settle at
$102.46 a barrel. Last week, the contract hit a 14-month
intraday low of $101.07 and it has been unable this week to
break out of the $101-$104 range.
U.S. crude for October rose 67 cents to settle at
$94.55 a barrel.
The spread between the two benchmarks widened to $9.15
during the session, then narrowed to settle at $7.91.
"Brent-U.S. crude pushed above $9 again and that's a pretty
lofty premium given that we don't have a supply disruption,"
said Gene McGillian, an analyst with Tradition Energy in
Political instability in Iraq and Libya continued to weigh
on investors' minds, even though oil exports from the two
countries have actually risen in recent months.
Libya's National Oil Corp (NOC) said on Thursday the
country's oil production had risen to 665,000 barrels per day
(bpd) from 650,000 bpd earlier this week.
Analysts say a revival of Libya's oil industry may be
short-lived as armed groups and two parliaments fight for
control of the North African country.
An Islamist insurgency in Iraq also threatens to derail
long-term output plans set by OPEC's second largest producer.
Rapid rises in North American oil production over the last
three years have more than compensated for output losses due to
conflicts in the Middle East and North Africa, the U.S. Energy
Information Administration (EIA) says.
U.S. oil production grew by more than 4 million barrels per
day (bpd) between January 2011 and July 2014. During the same
period, 2.8 million bpd of global oil production was knocked out
by unplanned supply outages, the EIA said on Wednesday.
Global oil demand has increased less than expected over the
last few years and analysts say the developing trade dispute
over the Ukraine crisis could also help curb fuel consumption.
Hopes that the presidents of Russia and Ukraine could reach
a ceasefire deal dimmed after Ukraine accused Russia of
launching a new military incursion.
(Additional reporting by Christopher Johnson in London,
Florence Tan in Singapore; editing by David Clarke, David Evans
and Chizu Nomiyama)