(Repeats to fix headline tag)
* China Dec industrial output up 18.5 pct, less than
expected
* U.S. crude inventories unexpectedly decline -API
* World Bank sees risk from stimulus phase out
By Alejandro Barbajosa
SINGAPORE, Jan 21 (Reuters) - Oil was steady below $78 on
Thursday after strong Chinese growth data offset bearish
sentiment following a World Bank outlook highlighting risks
that the global economic recovery may run out of steam.
China's annual gross domestic product growth accelerated in
the fourth quarter to 10.7 percent from a revised 9.1 percent
in the third, the National Bureau of Statistics (NBS) said on
Thursday. []
But world growth could falter as governments pull back some
of the extraordinary liquidity they pumped into markets, the
World Bank said on Wednesday. []
U.S. crude oil for March delivery <CLc1>, the new
front-month contract after February expired on Wednesday, rose
14 cents to $77.88 a barrel by 0532 GMT. Prices hit their
lowest this year at $76.76 on Tuesday. London Brent crude
<LCOc1> declined 1 cent to $76.31 on Thursday.
"For all of this year we are going to have a big focus on
China because it will be the main driver of demand," said Tony
Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
"Because it is a command-style economy, things can change
quickly. What was bullish could turn bearish if China puts on
the brakes."
A 4 trillion yuan ($585 billion) fiscal stimulus package
was complemented by an unprecedented surge in lending by
China's predominantly state-owned banks, ensuring that the
nation was the first major economy to recover decisively from
the credit crunch.
But the government has signalled it will tighten credit
this year, calling on banks to increase reserves and curb
lending.
Industrial production increased 18.5 percent last month
compared to expectations for a 20 percent jump.
The World Bank said in its annual Global Economic Prospects
report for 2010 that the subdued recovery in the world economy,
led by China and India, poses special risks for developing
countries that might face stiffer borrowing costs, reduced
credit and capital flows.
RECORD RUNS
On Chinese oil data, the country's December crude runs, or
the amount of crude processed by refiners, jumped 24.8 percent
from a year earlier to a record 8.15 million barrels per day.
For the whole year of 2009, runs posted an increase of 7.9
percent. []
Soaring output from refineries has turned China into a
sporadic oil-products exporter, boosting requirements of
imported crude.
U.S. crude reached a 15-month high of $83.95 a barrel on
Jan. 11. "If the Chinese economy just goes boom, then we could
go another step higher," Nunan said. "For now, we still have
too much inventory around and too much spare capacity."
Prices are 47 percent below their July 2008 records near
$150, but have almost doubled from lows near $32 reached by the
end of that year.
"Prices dipped too low and recovered just from the fact
that the world economy did not go into a full depression,"
Nunan said. "Now prices have already built in economic growth,
but if we don't see that, we are going to get a lot of
turbulence in the oil market."
U.S. INVENTORIES
In the U.S., an unexpected drop in crude stockpiles shown
by an industry report had little impact on prices. The American
Petroleum Institute (API) said inventories fell 1.8 million
barrels last week against forecasts for a 2.4 million gain.
The nation's distillate inventories, which include heating
and diesel, dropped a larger-than-expected 3.4 million barrels.
Supplies were forecast to have slid by 100,000 barrels, a
Reuters survey showed.
Gasoline stocks rose 667,000 barrels, less than a forecast
gain of 1.7 million barrels. []
Inventory data from the government's Energy Information
Administration (EIA) will be published on Thursday at 1600 GMT.
Both weekly reports were delayed by a day because of a U.S.
holiday on Monday.
(Editing by Clarence Fernandez)
