* Feb Brent jumps briefly above $99, 27-month high
* China ups lenders' reserve rates requirement
* Brent premium to U.S. crude at 23-month highs of $8/bbl
* Coming Up: Feb Brent crude expiration on Friday
(Recasts, updates prices and market activity, changes byline
and moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Jan 14 (Reuters) - Brent crude oil rose to a
27-month peak above $99 a barrel on Friday ahead of the
February contract's expiration, as it continued its push toward
$100, while China's move to lift lenders' reserve requirements
pressured U.S. oil prices.
ICE Brent futures have traded above U.S. crude since August
last year, supported by a combination of dwindling North Sea
crude supplies and disruption of oil grades priced off it,
traders said. []
U.S. crude prices were pressured by China's move to lift
lenders' reserve rate requirements by 50 basis points in its
ongoing effort to tame inflation.
That was China's seventh increase since early 2010,
prompting concern that its appetite for buying oil and other
commodities could be curbed.
In London, ICE Brent crude for February <LCOc1> rose 62
cents, or 0.63 percent to $98.68 a barrel, at 11:06 a.m. EST
(1606 GMT), having traded as high as $99.14, highest since
Brent reached $100.31 in October 2008.
The February contract expires at the end of Friday's
trading.
U.S. crude oil for February delivery <CLc1> fell 55 cents,
or 0.6 percent, to $90.85 a barrel, off its earlier $90.10 low.
February crude options expire on Friday.
The discount for U.S. crude futures' benchmark West Texas
Intermediate (WTI) against Brent <CL-LCO1=R> reached fresh
23-month highs over $8 a barrel, the widest discount since
February 2009. []
Brent's strength helped U.S. crude pare its losses.
The expiry of the February Brent futures contract on Friday
had some, but not all, analysts expecting it to erode some of
the strong differential, as February traded stronger than
March.
"We are not convinced that the extreme front premium of
Brent to WTI (March or April) can be sustained," Petromatrix's
Olivier Jakob wrote in a note.
Earlier, crude prices had shown a muted reaction to several
U.S. economic reports.
An increase in the Consumer Price Index and rising
industrial output led by utility output after an unusually cold
winter was eclipsed by the China reserve requirement hike and
the strength of the dollar, which weakened later.
China's recent tightening policy has prompted worries that
Beijing's appetite for buying oil and other commodities could
decrease. [] []
A separate report on Friday showed that rising gasoline
prices pushed down U.S. consumer sentiment in early January,
overshadowing an improved job outlook and passage of temporary
federal tax breaks, a Thomson Reuters and the University of
Michigan survey released on Friday showed. []
(Additional reporting by Zaida Espana in London and Alejandro
Barbajosa in Singapore; Editing by Marguerita Choy)
