* Libyan crude oil exports fall to lowest level in six weeks
* U.S. industrial output posts largest gain in 7 months
* Market eyes talks between Iran and world powers
By Ron Bousso
LONDON, Oct 28 (Reuters) - Brent crude rose above $108 abarrel on Monday after a new drop in Libya's oil exports revivedsupply concerns while strong gains in U.S. industrial outputboosted demand hopes.
Brent for December delivery was up $1.39 at $108.32a barrel by 1412 GMT, ending three days of losses. U.S. crude was up 13 cents at $97.98 a barrel.
"The key driver today for Brent is Libya. The fact that U.S.industrial output did pick up is supportive of crude," saidAmrita Sen, chief analyst at consultants Energy Aspects.
Libya's crude oil exports have fallen to the lowest level insix weeks after operations at its western port of Zawia weresuspended at the weekend.
Libya's exports are now less than 250,000 barrels per day(bpd), according to Reuters calculations, compared with acapacity of more than 1.2 million bpd.
"When there is less Libyan crude available it puts pressureon Brent, which are of similar light sweet grades," saidChristopher Bellew, oil trader at Jefferies Bache.
Crude output from the Organization of the PetroleumExporting Countries (OPEC) member partly resumed in Septemberfollowing weeks of unrest in the north African country as someoilfields in the east remain shut.
U.S. industrial production recorded its largest increase inseven months in September as utilities output surged afterseveral months of declines, boosting hopes for increased demandin the world's top oil consumer.
Brent fell 2.7 percent last week, the biggest weekly drop ina month, as concern about higher supply and faltering demandoffset signs of faster economic growth in China.
Investors are also keeping an eye on a two-day meeting ofexperts from Iran and six world powers on Wednesday.
Western diplomats say the meeting, scheduled to take place aweek before the next round of negotiations in Geneva inNovember, could be instrumental in defining the outlines of anypreliminary agreement on Iran's uranium enrichment campaign.
U.S. and European sanctions against Iran over its disputednuclear programme have cut oil exports from the OPEC member bymore than half, underpinning global oil prices.
Iran has not halted its most sensitive uranium enrichmentwork, a senior Iranian parliamentarian said on Saturday,contradicting a statement by another lawmaker last week.
- Commodity Markets
- Brent crude