Brent holds above $113 on promising US, China data

SINGAPORE (Reuters) - Brent crude held above $113 on Friday, on track to post a second week of gains as robust economic data from the United States and China lifted the outlook for fuel demand in the world's two largest oil consumers.

Manufacturing in China and the U.S. grew this month at the quickest pace in about two years, while data suggesting German growth picked up boosted hopes for a swifter euro zone recovery.

Brent crude for March delivery had inched down 5 cents to $113.23 a barrel by 0710 GMT. U.S. crude slipped 17 cents to $96.12.

"Economic statistics from the U.S. and China support an outlook of moderate growth in 2013 against a backdrop of a lower risk environment," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"Any improvement in industrial demand will help overall oil demand."

Employment in the United States also improved with the number of new claims for jobless benefits dropping to a five-year low last week.

The positive global economic data has boosted investor appetite for riskier assets, buoying global equities and some commodities.

Investors are closely watching the Seaway oil pipeline, after its operator reduced on Wednesday the oil flow rate to the U.S. Gulf Coast from Cushing by more than half, to 175,000 barrels per day.

The 400,000 bpd pipeline is a critical link intended to ease the glut at the WTI contract's delivery point in Cushing, Oklahoma.

Despite the volume cut, front-month U.S. crude prices are on track for a seventh straight week of gains. Trading sources have said the pipeline could be back to full capacity soon.

Its operator Enterprise Products Partners has no timetable for restoring full flows through the pipeline, a company spokesman said.

"Refinery turnarounds, rising production of Canadian oil sands and Bakken shale will compete to keep pipelines congested in the first quarter," said Stephen Schork, editor of The Schork Report, an energy research letter.

The spread between Brent and West Texas Intermediate crude prices held around $17, after widening by nearly $2 on Wednesday.

In weekly inventories data, a larger than expected fall in gasoline stocks lifted RBOB gasoline futures by nearly 1 percent on Wednesday.

U.S. crude stockpiles rose last week as refineries in the country processed less oil, government data from the Energy Information Administration showed.

Crude inventories climbed 2.81 million barrels in the week to January 18, compared with expectations for a 1.8 million barrel rise.

Source: http://news.yahoo.com/brent-holds-above-113-promising-us-china-data-080334424--finance.html

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