This is called capillary action.
Have you noticed how water forms drops instead of breaking apart? This is called cohesion.
Have you noticed how water stick to things like the edge of a glass or thr paper towel itself? This is called adhesion.
Both of these working together causes capillary action. The water touches the paper and sticks to it via adhesion. This pulls up the water behind it via cohesion. The surface of the water at the top is able to then touch new paper and repeat the whole process.
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