(Refiles to remove extra word from headline)
* China December inflation rate at seven-month high
* Saudi supply cut, Yemen export disruption support
* Coming up: U.K. November Industrial output at 0930 GMT
By Ramya Venugopal
SINGAPORE, Jan 11 Brent crude futures fell
further below $112 a barrel on Friday after faster-than-expected
inflation in China eased investors' confidence in the growth
prospects of the world's second biggest oil consumer, but output
cuts in Saudi Arabia limited the drop.
China's annual consumer inflation sped to a seven-month high
of 2.5 percent in December, narrowing the scope for further
policy easing to aid growth and leading Asian shares to give up
"China's inflation was hotter than expected which might add
a little bit of downside risk and some investors may be cashing
in profits," said Ben Le Brun, market analyst at OptionsXpress.
Front-month Brent futures shed 26 cents to $111.63 per
barrel at 0204 GMT, heading for their third weekly gain. U.S.
crude rose 6 cents to $93.88 per barrel, poised for their fifth
Oil prices gained support this week from better than
expected trade numbers from China, relief after the short-term
resolution of the U.S. fiscal crisis and data showing a sharp
drop in U.S. crude imports in the last week of 2012.
But the gains in both contracts were smaller than in
previous weeks, suggesting underlying concerns. U.S. crude
gained less than 1 percent while Brent added less than 0.5
Traders said investors this quarter will focus on further
talks between U.S. lawmakers to resolve the debt crisis as well
as seeking cues on the global economy amid expectations that
world growth in 2013 may be higher than 2012.
A drop in oil supplies from the Middle East may keep prices
well supported in the next few weeks.
OPEC's top producer slashed oil production by 700,000
barrels per day (bpd) to 9 million bpd during the last two
months of 2012, according to industry sources. Major customers
for Saudi crude said the cuts were driven by lower demand.
Saudi Arabia says it favours an oil price of about $100 a
barrel, but recent reports suggested that the market is well
supplied and that output from North America will grow rapidly
over the next two years.
Flows of oil through Yemen's main crude export pipeline have
stopped again after it was blown up by unknown attackers on
Thursday morning, government and oil industry officials said.
Yemen resumed oil pumping on Dec. 31 at a rate of around
70,000 barrels per day (bpd) after the latest repairs to the
pipeline which used to carry around 110,000 bpd of Marib light
crude to an export terminal on the Red Sea before a spate of
attacks began in 2011.
Oil prices may also get a boost from a brightening global
The euro zone economy will recover later in 2013 and there
are already signs of stabilisation, the European Central Bank
said on Thursday after it unanimously held interest rates at a
China's export and import growth rebounded more strongly
than expected in December, suggesting a rebound in activity in
the world's biggest energy consumer and early signs of an
increase in global demand for its goods.
Exports grew 14.1 percent versus analyst expectations of 4
percent and November's 2.9 percent increase, while imports grew
6 percent compared with analyst's forecasts of 3 percent and
November's zero increase.
In the United States, data showed that initial jobless
claims rose last week although the jobs market continues to grow
at a moderate pace.
(Editing by Miral Fahmy)