* China inflation jumps to 32-month high
* Allies vow to keep up military campaign in Libya
* Coming Up: U.S. industrial output for March at 1415 GMT
(Updates prices, detail, adds link to factbox)
By Christopher Johnson
LONDON, April 15 (Reuters) - Oil prices steadied, with North
Sea Brent crude just above $122 a barrel on Friday after data
showed China's economic growth beating forecasts, despite
government efforts to cool expansion and curb inflation.
Strong growth in the world's second-largest oil consumer is
bullish for fuel but is also encouraging Beijing to tighten
monetary policy in moves that could slow consumption.
Prices were supported by worries over supply from the Middle
East and Africa as fighting in Libya continued but were tempered
by a note from Goldman Sachs recommending underweight allocation
to commodities on a three-to-six-month horizon.
ICE Brent crude <LCOc1> for June was up 30 cents at $122.30
a barrel by 1325 GMT. U.S. crude futures <CLc1> for May fell to
$107.91 a barrel, down 20 cents.
"The pace of Chinese growth points to further monetary
tightening there, which could weigh on Chinese fuel demand in
the future," said Carsten Fritsch, an analyst at Commerzbank.
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Stories on Middle East unrest: [] []
Factbox on oil prices: []
Libya Graphics http://link.reuters.com/neg68r
Interactive graphic http://link.reuters.com/puk87r
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Chinese economic annual growth eased slightly in the first
quarter to 9.7 percent from 9.8 percent in the previous quarter,
the National Bureau of Statistics said. []
Preliminary government data also showed China's implied oil
demand grew by double digits for the sixth consecutive month in
March but was down from February as refineries scaled back runs
on maintenance and soaring crude costs. []
GOLDMAN
Analysts expect China to raise reserves at banks and hike
interest rates again to put a lid on consumer prices after
growth eased just a touch in the first quarter, while its
inflation jumped to a 32-month high. []
Prices came under some pressure after the release of a
research note by Goldman Sachs recommending investors go
underweight commodities over a horizon of three to six months.
The note echoed a Goldman call on Monday and also helped
knock down oil and copper prices, although the U.S. bank said it
was bullish over a one-year period. []
"Barring further persistent increases in oil prices that
damage demand, we expect demand growth to continue to outpace
supply growth, leading to much lower inventories and OPEC spare
capacity later next year, which would be hastened should the
Libyan outage persist," Goldman said in Friday's report.
Fritsch said worries about possible supply disruptions as a
result of unrest in the Middle East and North Africa were still
the key factor behind the strength of oil prices.
"We still think that oil prices are strong mainly because of
supply-side worries and the weaker dollar, not because of an
increase in demand," Fritsch said.
"It all depends when the risk premium starts to decline. We
believe the risk premium for oil is worth about $20 per barrel."
The dollar index <.DXY>, which tracks the dollar's
performance against a basket of major currencies, rose slightly
on Friday after falling to a 16-month low. []
Iran's oil minister said on Friday oil prices were "not
extraordinary", despite their recent surge.
"The price depends on the oil market ... If you consider the
price ... in the past 40 years, what we have today is a logical
price," Massoud Mirkazemi told a news conference.
He reiterated Iran's stance that there was no need for an
emergency OPEC meeting.
Ahmad Qalebani, the head of state National Iranian Oil
Company, said: "The price, which is around $120, is a good price
for us."
(Additional reporting Florence Tan in Singapore; editing by
Jane Baird)
