* Falling energy costs cut euro zone factory prices
* Manufacturing in U.S., China expanded in December
* Focus on ECB meeting this week
(Previous SINGAPORE, updates prices)
By Alex Lawler
LONDON, Jan 7 Oil eased to $111 a barrel on
Monday as some investors booked profits after last week's gains,
although optimism that the world's biggest economies are on a
steady recovery path limited the decline.
The crude market rallied last week after U.S. lawmakers
reached a last-minute agreement to avert the so-called "fiscal
cliff", or tax increases and spending cuts that would have
threatened growth in the world's top oil consumer.
Brent crude fell 27 cents to $111.04 a barrel by
1013 GMT, after rising 0.6 percent last week. U.S. crude
slipped 29 cents to $92.80 after adding 2.5 percent last week.
"There is a bit of pullback in oil prices after the rally
last week. Oil futures had gained quite a bit last week," said
Victor Shum, senior partner at IHS Purvin & Gertz in Singapore.
Reports on Friday showed U.S. employers kept up an even pace
of hiring in December and the country's services sector expanded
briskly. This, as well as earlier data showing expansion in U.S.
and Chinese manufacturing, bolstered the outlook for oil demand.
This week's focus for financial markets will be on the
European Central Bank. Investors are looking to the central
bank's monthly meeting on Thursday to see if it hints at an
interest rate cut early this year.
Figures on Monday showed euro zone factory prices fell for
the first time in five months in November, pulled down by a
slide in the cost of energy and giving the ECB room to consider
another interest rate cut.
Investors will also be watching the U.S. Federal Reserve's
stance on monetary easing, after top Fed officials and some U.S.
economists suggested the central bank might halt its asset
purchases this year.
Supply concerns arising from tension and fighting in the
Middle East could support oil prices. The United Nations said
last week more than 60,000 people have died in Syria's uprising
and civil war.
(Reporting by Ramya Venugopal and Alex Lawler; editing by