* Libya says reopening western oilfields, but output unchanged * Pro-Moscow rebels in east Ukraine call to join Russia * China's implied oil demand rose 1.1 pct in April (Recasts, updates prices) By David Sheppard LONDON May 13 (Reuters) - Brent crude reversed early losses to rise towards $109 a barrel on Tuesday, as traders expressed doubt about how quickly supplies will return from Libya, while the threat of further Western sanctions against Russia provided further support. Libya said on Monday its western oilfields were ready to reopen, having been blocked by protests since March, potentially raising crude output from the North African country by 500,000 barrels per day (bpd). On Tuesday output from the country was still just 235,000 bpd, however, a spokesman for the National Oil Corporation said, and the timing of any restart at three major fields in the west remained unclear. Brent crude for June delivery was up 42 cents at $108.83 a barrel by 1000 GMT, after closing up 52 cents in the previous session. Prices had slipped in early trade to a low of $108.05, but reversed after the Libyan NOC statement. U.S. crude rose 77 cents to $101.36a barrel, after climbing 60 cents to $100.59 a barrel in the previous session. "The reaction to the announcement in Libya has been fairly limited given the risk surrounding the issues in Ukraine," said Carsten Fritsch, a commodities analyst at Commerzbank in Frankfurt. Pro-Moscow rebel leaders called for Donetsk to become part of Russia, while Moscow appeared to use the results of a disputed referendum to put pressure on Kiev to hold talks with rebels in two breakaway regions. The European Union imposed sanctions on a top aide to Russian President Vladimir Putin and the commander of Russian paratroopers as well as on two confiscated Crimean energy companies, raising pressure on Moscow. Saudi Arabia's oil minister has pledged that the world's biggest oil exporter would boost supplies if any disruption is caused by the crisis in Ukraine. The head of the International Energy Agency, the west's energy watchdog, said it had no plans to release emergency crude oil stocks due to the tensions with Russia. "We only release stocks when there is a serious disruption the market cannot solve," IEA head Maria van der Hoeven said on the sidelines of a conference in Seoul. SUMMER DRIVING U.S. oil futures were also being supported by a possible draw in crude inventories last week as the United States nears the start of its summer driving season with higher demand for fuel, ANZ analysts said in a note. The consensus estimate of four analysts in a Reuters poll on Monday, however, showed commercial crude oil stocks would remain unchanged at 397.6 million barrels in the week to May 9. The survey was taken ahead of weekly inventory reports from industry group, the American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA). Growth in China's industrial production and retail sales for April came in below forecasts on Tuesday, further confirming a slowdown in growth in the world's second-largest oil consumer as the government drives reform of the economy. Industrial production climbed 8.7 percent against a forecast 8.9 percent, while retail sales rose 11.9 percent, compared with an estimate of 12.2 percent. Both growth figures were the weakest in at least five years. China's implied oil demand in April climbed 1.1 percent to 9.71 million bpd from a year earlier, according to a Reuters calculation based on preliminary data. (Additional reporting by Charles Staples in London, Keith Wallis in Singapore and Jane Chung in Seoul; editing by Jane Baird and Jason Neely)

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