Oil steadies above $116 on economic outlook, Mideast

LONDON: Brent crude oil consolidated above $116 per barrel on Monday, not far off 4-1/2 month highs, on signs of improving economic growth in the United States and China and concern over geopolitical tension in the Middle East.

Positive US jobs data and confirmation of a mild recovery in China supported by purchasing manager surveys have allayed concern over weak demand from the world's two biggest oil users.

Stock markets have been buoyant with Asian shares climbing to 18-month highs on Monday, and the euro has also been strong after manufacturing figures suggested the European bloc had passed the worst point in its recession.

Brent traded 35 cents lower at $116.41 per barrel at 0900 GMT, close to a 4-1/2 month high of $117.07 reached on Friday. Brent has risen for three straight weeks.

US crude slipped 45 cents to $97.32 per barrel, after rising for eight consecutive weeks, the longest such winning streak since July-August 2004.

"The market is long due a correction. Still, there is no point standing in front of a moving train," VTB Capital oil strategist Andrey Kryuchenkov said.

Analysts at US brokerage Jefferies Bache agreed:

"We are maintaining a bullish trading stance," they wrote in a note to clients. "We will strongly caution against any attempts to pick a top to this strong price advance that is approaching two months in duration."