* Libyan rebels occupying ports refuse to deal with new PM * U.S. crude stocks fell 1.8 mln barrels last week - API * Cushing stocks down 1.5 million barrels - API * Increased risk of Ukraine civil war supports oil prices * Coming up: EIA weekly inventory data at 1430 GMT (Updates prices, adds quote) By David Sheppard and Julia Fioretti LONDON, May 7 (Reuters) - Brent crude edged further above $107 a barrel on Wednesday, underpinned by rising tensions in Ukraine, though its premium over U.S. prices narrowed after an industry report showed a sharp draw in inventories in the world's largest oil consumer. Brent rose 21 cents to $107.28 a barrel by 0952 GMT, after ending the previous session 66 cents lower. U.S. crude rose 88 cents to $100.36 a barrel, on course for its biggest one-day gain since early April. The Brent-WTI spread CL-LCO1=R narrowed to $6.90 a barrel, the smallest gap in more than a week. Crude inventories in the United States fell by 1.8 million barrels last week, albeit from record high levels, the American Petroleum Institute (API) said late on Tuesday, going against analyst expectations for a 1.4-million-barrel gain. The API said stocks at the Cushing, Oklahoma delivery hub of the U.S. oil futures contract - known as West Texas Intermediate (WTI) - fell by 1.5 million barrels. "WTI has found some support from the API numbers, the fall in total stocks and also a strong decline in Cushing stocks," Commerzbank analyst Carsten Fritsch said. "Brent should benefit more from Ukraine," he added, due to its closer proximity to the region and role as the international seaborne benchmark. Investors are awaiting confirmation of the API numbers from the U.S. government's Energy Information Administration, which releases its more closely watched data later on Wednesday. Brent found further support from tensions in Libya, where rebels occupying major oil ports in the east of the country said on Wednesday they would not deal with new Prime Minister Ahmed Maiteeq, despite an agreement last month to reopen four eastern oil ports. Protests at Libya's major oilfields and ports have decimated its oil production from around 1.4 million bpd until mid-2013 to just over 200,000 bpd, and slowed exports to a trickle. Unrest also hit oil infrastructure in Yemen where assailants blew up its main oil export pipeline, halting crude flows. The 270-mile (435-km) pipeline carried crude from the Maarib fields in central Yemen to the Ras Isa oil terminal in the Red Sea. RISK OF UKRAINE CIVIL WAR Heightening tensions in Ukraine and the possibility of the country slipping into civil war also helped lift oil markets, as traders weighed the risk of supply disruptions from Russia, the world's second-largest oil exporter. Peace efforts in Ukraine seemed less likely as both supporters of Russia and of a united Ukraine accused each other of tearing the country apart, as violence spread to the eastern port of Mariupol. The Obama administration is working on new sanctions to impose on Russia if it ramps up aggression against Ukraine, such as preventing elections from taking place in much of the country or recognising another separatist referendum, U.S. officials said on Tuesday. While gas and oil supplies have not been significantly disrupted by the Ukraine situation so far, traders and analysts say the risk remains that the United States and European Union could target the Russian energy industry, or Moscow could choose to restrict exports.

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