RTRS:UPDATE 3-Oil slips below $108, faces monthly fall on China worries
* Households, trade keep U.S. economy humming in fourth quarter
* Asian stocks edge lower, U.S. dollar at one-week highs (Changes dateline, previous SINGAPORE, updates prices)
By Lin Noueihed
LONDON, Jan 31 (Reuters) - Global oil prices slipped below $108 a barrel on Friday and were set for their first monthly drop in four with worries over faltering Chinese consumption outweighing expectations that a strengthening U.S. economy would boost global demand.
Brent crude, the international benchmark, was poised to slip 2.6 percent in January after data showed China's fuel consumption rose at its slowest pace in over 20 years in 2013.
Drawing strength from a cold spell and an improving economy, the U.S. futures contract, known as WTI, is set to end little changed, narrowing the difference between the two.
Brent crude had slipped 28 cents to $107.67 a barrel by 0950 GMT, after closing 10 cents higher in the previous session. Trade was thin with some Asian markets closed for the Lunar New Year holiday.
U.S. oil shed 26 cents to $97.97. The spread CL-LCO1=R held near the lowest settlement price since Nov. 7.
"Global oil growth forecasts continue to get revised upwards, primarily driven by an improving U.S. economy," said Ben Le Brun, a market analyst at OptionsXpress in Sydney. "That's a good thing and will underpin oil prices. The markets should get used to the new reality of slowing growth in China."
Despite strong support, gains in the dollar may put pressure on oil over the next few days, Le Brun said. Brent faces support at around $105 and the U.S. benchmark at $97 should they weaken from current levels, he said.
The U.S. dollar traded at one-week highs against a basket of major currencies. A strong greenback weighs on commodities such as oil that are priced in the currency.
The dollar gained partly as U.S. gross domestic product grew at a 3.2 percent annual rate in the final three months of last year. While that was a slowdown from the third-quarter, it was a far stronger performance than had been anticipated earlier in the quarter.
The dollar is also strengthening as the U.S. Federal Reserve stuck with its plan to keep cutting monetary stimulus.
"The strong Q4 USD GDP print drove gains and with tapering now decided for another month, we expect a little more upside in WTI in the near-term," analysts at ANZ said in a note. "Confidence in the U.S. economy continues to improve as does underlying energy demand." (Additional reporting by Manash Goswami in Singapore, editing by |William Hardy)
