By Florence Tan
SINGAPORE, Jan 24 (Reuters) - 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 rebound.
'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 showed.
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 . 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) Keywords: MARKETS OIL/
(Florence.Tan@thomsonreuters.com)(+65 6870 3497)(Reuters Messaging: email@example.com)
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