* China industrial output up 13.3 percent in May * China may tighten monetary policy further to cap inflation * Brent premium to U.S. crude touches record $22.22/bbl * Brent premium to Dubai widest since 2004 at $8.40/bbl * U.S. crude inventories probably fell by 1 mln bbls -POLL (Updates throughout) LONDON, June 14 (Reuters) - Crude futures edged higher on Tuesday after the impact of strong economic data from China, the world's second biggest energy consumer, was offset by expectation it might act to prevent the economy overheating. Brent crude for July LCOc1 climbed 3 cents to $119.13 a barrel by 0821 GMT, while U.S. futures CLc1 added 33 cents to $97.63. Prices rose off session lows after China's May industrial output jumped 13.3 percent from a year earlier, topping forecasts for a 13.2 percent gain, government data showed on Tuesday. At the same time, however, consumer price inflation accelerated to a 34-month high, signaling Beijing might continue to tighten monetary policy. [ID:nB9E7GG00R] "The government needs to tread a very fine line because the economy is still very hot. They may have to tighten again and that will have some effect on growth and a disruptive influence on oil demand, but I can't see anything derailing it," said Ben Le Brun, an analyst at CMC Markets in Sydney. China's implied oil demand in May rose above the 9 million barrel-per-day mark for the seventh month in a row, suggesting brisk consumption persisted, although growth in the world's second largest economy is slowing. [ID:nL3E7HE0E4] REGIONAL DISTORTIONS Any oil price strength has been concentrated on the Brent contract, which has notched up record premiums to its U.S. counterpart. Early on Tuesday, Brent's premium to U.S. crude reached a record $22.22 a barrel, reflecting oversupply in the U.S. market and relatively tight supplies in Europe, analysts said. The next sets of data on U.S. inventories will emerge later on Tuesday and on Wednesday. U.S. crude oil inventories fell last week by 1 million barrels, after lower imports and as higher margins encouraged refiners to raise utilisation rates, a Reuters poll ahead of weekly industry and government reports showed on Monday. [EIA/S] Adding to the strain on crudes priced off the European benchmark, Royal Dutch Shell (RDSa.L) on Monday declared force majeure on its Nigerian Bonny Light crude oil loadings for June and July. Shell blamed production cutbacks caused by leaks and fires on its Trans-Niger Pipeline. [ID:nLDE75C14Q] Production of African crude has been disrupted since February, when civil war in OPEC nation Libya halted exports of about 1.3 million barrels per day (bpd) of high quality, light sweet crude. The Organization of the Petroleum Exporting Countries last week failed to reach agreement on a new output deal, but leading producer Saudi Arabia said it would produce whatever the market needed. Traders have struggled to interpret the price implications of the OPEC meeting, with some arguing disarray in the producer group is potentially bullish and others saying it gives Saudi Arabia licence to flood the market. Extra Saudi crude, however, comes at the price of reduced spare output capacity, which would probably increase volatility as the market loses its buffer to absorb unexpected supply disruption. Analysts told Reuters Global Energy Summit, any spare capacity could be quickly exhausted, although with time Saudi could bring on new supplies. [ID:nN13138830] Higher Saudi output is exerting pressure on the relative value of Middle East marker Dubai crude. Brent's premium to Dubai jumped 70 cents to $8.40 a barrel early on Tuesday, Reuters data showed. [ID:nL3E7HE0LR] That was the highest level since December 2004, when a glut of heavy sour crude depressed the relative value of exports from producers including Saudi Arabia, Kuwait, the United Arab Emirates, Iran, Iraq, Qatar, Venezuela and non-OPEC Mexico.

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