By Elizabeth Dilts
NEW YORK (Reuters) - Brent crude oil rose more $1.50 on Monday as Western powers considered tougher sanctions against Russia over its actions in Ukraine, while U.S. crude rose modestly after positive retail sales data signaled a rebound in the American economy.
Several European Union foreign ministers threatened Moscow with new sanctions and France's foreign minister said the group could hold an emergency summit next week if there is no breakthrough in talks involving Russia, Ukraine and the United States that are scheduled for Thursday.
Brent prices rose by as much as $1.79 after the Pentagon announced a Russian fighter aircraft made repeated low-altitude, close-range passes near a U.S. ship in the Black Sea over the weekend.
In Ukraine, pro-Russian separatists continued to occupy government buildings in the eastern part of the country while another group of rebels attacked a police headquarters as a military offensive threatened by the interim president in Kiev failed to materialize.
The United States said it was prepared to step up sanctions against Russia, a major exporter of crude oil to Europe and Asia, if the separatist action continued. ID:nL2N0N50AK]
U.S. retail sales logged their biggest gain in 1-1/2 years in March, the latest sign the economy is accelerating after its weather-induced winter slumber, lending support to U.S. crude oil prices.
Limiting gains across the global oil complex was the gradual reopening of several Libyan oil ports that had been blockaded by protesting rebel groups since last July.
"The geopolitical tensions are underlying the support in both Brent and U.S. crude," said Andrew Lipow, president of Lipow Oil Associates in Texas. Lipow said Libyan exports could threaten prices, but "the general market feeling is 'show me the oil' before we believe progress is being made."
Brent crude was up $1.46 cents at $108.77 a barrel at 12:58 p.m. EDT (1658 GMT). U.S. oil rose 28 cents to $104.02 a barrel.
Brent's premium over U.S. crude oil narrowed on Friday to $3.28, its tightest point since Sept. 20, causing sell-off pressure in U.S. crude, analysts said. The spread was last trading at $4.76.
In Libya, the western Zawiya oil port was operating normally after protesters vacated the entrance to the facility and the adjoining refinery reopened, developments that had briefly pushed oil into negative territory.
However, the eastern Zueitina oil port was still not under government control one week after an agreement with rebel groups to re-open it along with the Hariga terminal.
An almost complete cut in Libyan supply from around 1.4 million barrels per day under the previous government has underpinned prices for nearly 10 months, but the port reopenings could enable a substantial recovery in exports.
In Nigeria, a bomb exploded at a crowded bus station on the outskirts of Abuja and killed 71 people during rush hour on Monday morning, raising concerns about the spread of an Islamist insurgency.
It was the first attack near the Nigerian capital for two years, and led to increased worries about oil supply disruption.
Investors awaited fresh economic growth data from China, the world's second-biggest oil consumer.
In a Reuters poll, economists forecast that growth slowed to 7.3 percent in the first quarter from 7.7 percent in the final quarter of 2013. This would be the slowest pace of growth in five years and near the minimum needed to ensure stable employment.
(Additional reporting by Simon Falush in London and Keith Wallace in Singapore; editing by David Evans, Peter Galloway and Tom Brown)
