* China HSBC flash PMI hits 2-year high in January
* Concern over swollen Cushing oil stocks weighs on WTI
* Brent-WTI spread narrows after widening almost $2 on
* Coming up: EIA weekly oil inventories data at 1600 GMT
By Florence Tan
SINGAPORE, Jan 24 Brent crude held above $112 a
barrel on Thursday, supported by upbeat manufacturing data from
China that could mean higher fuel demand to come in the world's
second largest oil consumer.
Growth in China's giant factory sector accelerated to a
two-year high in January, HSBC's preliminary private survey
showed in an encouraging sign for the country's economic
"We're expecting second quarter to be better than the first
in terms of GDP growth in China," ANZ commodities analyst
Natalie Rampono said. "Given that the data was better than
expected, the markets could move higher in the rest of the day."
Brent crude for March delivery edged down 22 cents
to $112.58 a barrel by 0333 GMT. U.S. crude was at
$95.38, up 15 cents, rebounding from a 1.5 percent fall on
Wednesday on worries that inventories at contract delivery point
Cushing, Oklahoma, may swell further.
China's oil demand could grow by more than 7 percent to 11.3
million barrels per day (bpd) this year, Rampono said.
The world economy should perform slightly better this year,
growing by 3.3 percent, as recovering growth in Asia will
gradually overpower the political and economic malaise in the
West, Reuters polls of more than 600 economists worldwide
Fears of a damaging default by the United States were
temporarily alleviated after a plan was passed on Wednesday to
allow the federal government to keep borrowing money through
mid-May. But Asian equities opened lower on Thursday, weighed
down by disappointing results from Apple Inc.
SEAWAY PUMP RATE CUT
In the United States, a surprise cut in the oil pump rate at
the newly expanded Seaway oil pipeline dragged down West Texas
Intermediate (WTI) crude prices.
The pipeline, aimed at reducing bulging inventories in
Cushing by sending oil to the Gulf Coast, has cut its crude flow
by more than half to 175,000 barrels per day. It was not
immediately clear on Wednesday what the constraints were.
Brent and WTI contracts are trading in opposite directions
on Thursday, slightly narrowing the spread between them
CL-LCO1=R. The spread widened by almost $2 a barrel to close
at $17.57 a barrel on Tuesday.
WTI could come under further pressure if data from the U.S.
Energy Information Administration showed a bigger than expected
rise in crude stockpiles, analysts said.
U.S. crude inventories rose 3.2 million barrels in the week
to Jan. 18, data released on Wednesday by the American Petroleum
Institute showed. Analysts were expecting a 1.8 million barrels
build in crude supplies, a Reuters poll showed.
(Editing by Tom Hogue)