* Feb Brent reaches $99.20 intraday before expiry
* Brent premium to U.S. crude at 23-month highs of $8
* China's hikes lender reserve rates requirement
* Coming Up: US markets shut for M.L.K. holiday Monday
(Recasts, updates with settlement prices, detail
throughout)
By Robert Gibbons
NEW YORK, Jan 14 (Reuters) - Brent crude rose above $99 a
barrel on Friday, failing to reach $100 before the front-month
contract expired, but helping lift U.S. oil prices despite
China's latest move to tighten credit.
The strength of U.S. equities and Brent helped U.S. crude
end higher after seesawing and being pressured early by China's
move to lift lenders' reserve rate requirements by 50 basis
points in its ongoing effort to tame inflation.
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.
In London, expiring ICE Brent crude for February <LCG1>
settled at $98.68, up 62 cents, the highest close since the
Sept. 26, 2008, close at $103.54, and reaching $99.20 intraday,
the highest front-month price since Brent hit $100.31 intraday
on Oct. 1, 2008.
The week's 5.73 percent rise was best weekly percentage
rise for Brent since the week to Dec. 3, 2010.
New front-month March Brent <LCOH1> settled at $98.38, up
$1.09, trading as high as $98.75.
U.S. crude oil for February delivery <CLc1> rose 14 cents,
or 0.05 percent, to settle at $91.54 a barrel, in choppy
trading having bounced off a $90.10 low.
The expiration of February crude options on Friday added to
the price volatility. The U.S. February contract expires next
Thursday.
U.S. heating oil futures <HOc1> ended at a 27-month peak on
cold weather and expectations for improving diesel demand in an
improving economy.
U.S. gasoline futures <RBc1> posted a nearly 2 percent gain
despite rising consumer worry about high pump prices.
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.
[]
Stronger-than-expected earnings from JPMorgan Chase & Co
lifted the stock market, offsetting lukewarm economic data and
helping S&P 500 to its seventh straight week of gains. []
"Equities and oil seem a bit toppy, and U.S. crude hasn't
been able to push to far above $92, but if you get a $100 Brent
print then U.S. crude should take off," said Richard Ilczyszyn,
senior market strategist at Lind-Waldock in Chicago.
"With gasoline prices this high you may start to see some
demand drop and the bigger story may be the China reserve rate
hike and its impact on commodities."
A separate report showed December U.S. retail sales rose
slightly less than expected, though total 2010 sales reversed
two years of contraction with the biggest gain in more than a
decade. []
Early on Friday, U.S. oil and other commodities felt
pressure from the China reserve requirement hike.
China's recent tightening policy has prompted worries that
Beijing's appetite for buying oil and other commodities could
decrease. []
BRENT/U.S. CRUDE SPREAD WIDENS
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.
February Brent's approaching expiration had analysts
expecting it to erode some of the strong differential, as
February had been trading at a premium to March. But that was
before the March contract's strong performance on Friday, which
narrowed the deficit to February to 30 cents.
Trading volumes were robust ahead of Monday's U.S. Martin
Luther King Day holiday that will shut open outcry trading for
U.S. crude on the New York Mercantile Exchange, though
electronic trading for Tuesday trade date will be available.
(Additional reporting by Gene Ramos in New York, Zaida Espana
in London and Alejandro Barbajosa in Singapore; Editing by Lisa
Shumaker)
