* U.S. jobless claims data point to firmer recovery * Risk of supply disruption from Iran, Iraq supports * Coming Up: U.S. weekly CFTC commitment of traders data; 2030 GMT (Updates prices, adds dollar weakness) By Francis Kan SINGAPORE, Dec 23 (Reuters) - Brent futures rose above $108 a barrel on Friday, lifted by fresh signs of a strengthening U.S. economy and a weaker dollar. U.S. government data showed new claims for unemployment benefits dropped to their lowest in 3-1/2 years, while consumer sentiment at the world's biggest oil consumer improved in December to its highest level in six months. The U.S. dollar slipped against the euro and a basket of currencies, making dollar-denominated assets like oil cheaper. Brent crude climbed 18 cents to $108.07 a barrel by 0712 GMT after settling Thursday 18 cents higher at $107.89 a barrel. For the week, Brent is poised to rise 4.9 percent, reversing losses in the previous week. U.S. crude gained 25 cents to $99.78 a barrel. The benchmark is set for a 6.7 percent weekly gain, after falling the week before. "The highlight is the continuation of good data on the U.S. economy. China also seems to have managed to orchestrate a soft landing, which is supportive of oil prices," said Ben Le Brun, market analyst with OptionsXpress in Sydney. "The problem child is still Europe." Trading volumes are expected to be low as investors stayed away from riskier assets ahead of the Christmas break, he added. China cut its banks' reserve ratio requirement earlier this month in the first reduction in almost three years. The move marks a shift in policy towards promoting growth as a global economic slowdown erodes demand for the nation's exports. Asian shares rose over 1 percent, following Wall Street's gains overnight on the U.S. data as signs of a strengthening economy in the United States encouraged a year-end bounce for riskier assets. SUPPLY RISKS Rising tensions in Iran and Iraq renewed fears of crude supplies being disrupted from the two OPEC producers. Supply disruptions pose a bigger risk to the market now as oil stockpiles in developed countries have fallen significantly over the past year, JP Morgan analysts said in a research note. Since the end of 2010, OECD crude and product inventories have fallen by 92 million barrels, or 2.3 percent, as of October, compared to the typical seasonal increase of 57 million barrels, they said. "With the Libyan outage, crude spiked about $20 a barrel, but the impact was cushioned by ample inventories. Moving into 2012 however, the global economy does not have this luxury," the report said. The bank expects Brent crude prices to trade between $100-120 a barrel if disruptions are kept to a minimum.

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