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UPDATE 4-Brent slips below $111 after China growth warning

Monday, 8 Oct 2012 | 6:56 AM ET

* World Bank says China economic slowdown could get worse

* Money managers cut U.S. crude futures, options net longs

* Turkey retaliates against Syrian bombing

(Updates prices, adds comment; paragraphs 6, 8-9, 13-14)

By Alice Baghdjian

LONDON, Oct 8 (Reuters) - Brent crude oil fell below $111 per barrel on Monday on concerns slower economic growth would curb oil demand, but supply worries stemming from tension in the Middle East helped check losses.

The World Bank on Monday cut its economic growth forecasts for East Asia and the Pacific region, home to two of the world's largest oil consumers, and said there was a risk the slowdown in China could be deeper and more prolonged than expected.

China has been a prop for the world economy, and global energy demand, at a time when many developed industrialised nations have seen slower growth or recession.

Concerns about Europe persist with the region's largest economy, Germany, seeing a fall in industrial orders, while a firm dollar after a surprise drop in the U.S. jobless rate also curbed oil prices.

A stronger dollar makes commodities priced in the U.S. currency more expensive for many end-consumers.

Brent crude for November fell to a low of $110.54, down $1.48, before recovering slightly to trade around $110.95 by 1040 GMT. U.S. crude fell $1.67 to a low of $88.21.

"The World Bank's pessimistic outlook for East Asian economies and warning that China's economic slump could deteriorate further ... had a hand in pushing prices lower," said David Wech, head of market analysis at Vienna-based consultancy JBC Energy.

The World Bank said the new forecasts marked the slowest growth in the Asia Pacific region since 2001, even slower than the peak of the financial crisis in 2009.

"It's probably China that holds the keys to all this," said Christopher Bellew, a broker at Jefferies Bache. "This certainly could have caused the retrace downwards today."

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphic - Oil in euros: Graphics - Israel/Iran: For a 24-hr Brent crude chart analysis ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> MIDEAST TENSIONS

Investors have turned more cautious as hedge funds and other large speculators cut their bets on higher oil prices for the second straight week in the seven days to Oct. 2, the U.S. Commodity Futures Trading Commission said.

Oil continued to draw support from worries about potential threats to supply as the Syrian civil conflict drags on and as Iran's dispute with the West over its nuclear program persists.

Turkey returned fire for a fifth day against incoming bombardment from northern Syria. The exchanges are the most serious cross-border violence in Syria's conflict and highlight how the crisis could destabilise the region.

"The ongoing shelling of Turkey by Syria is also fuelling concerns about the conflict in Syria spreading to the neighbouring country," said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.

"If this were to happen, oil production in the North of Iraq would be at risk, since the oil is transported to the West via pipelines through Turkey," he said.

The United States and Europe are looking at more economic sanctions to pressure Iran to abandon its nuclear programme.

Middle East conflicts and delays in the October loading of North Sea Forties cargoes have pushed Brent's premium

to U.S. crude to its highest since October 2011.

(Additional reporting by Christopher Johnson in London, and Florence Tan and Manolo Serapio Jr in Singapore; editing by William Hardy)

((christopher.johnson@thomsonreuters.com)(+44 207 542 6056)(Reuters Messaging: christopher.johnson.reuters.com@reuters.net))

Keywords: MARKETS OIL/