SINGAPORE: Brent futures were steady above $107 a barrel on Friday, supported by fresh signs of a strengthening US economy and the prospect of supply disruptions from the Middle East. US 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. Brent crude slipped 5 cents to $107.84 a barrel by 0550 GMT after settling Thursday 18 cents higher at $107.89 a barrel. For the week, Brent is poised to rise 4.6 percent, reversing losses in the previous week. US crude rose 28 cents to $99.81 a barrel. The benchmark is set for a 6.8 percent weekly gain, after falling the week before. "The highlight is the continuation of good data on the US 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 followed Wall Street higher on the US data, while the euro remained subdued on concerns over the debt crisis in Europe. SUPPLY RISKS Rising tensions in Iran and Iraq renewed fears of crude supplies being disrupted from the two OPEC producers. A rash of bombings hit Baghdad in the first big attack on Iraq's capital since a crisis between its Shi'ite Muslim-led government and Sunni rivals erupted after the withdrawal of US troops. State television quoted a navy commander as saying Iran's navy will conduct a 10-day wargame in an area from east of the Strait of Hormuz to the Gulf of Aden starting on Saturday, adding to oil supply worries.

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