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UPDATE 8-Oil slips on China growth warning, Middle East supports

Monday, 8 Oct 2012 | 1:58 PM ET

* World Bank says China economic slowdown may worsen

* Turkey retaliates again after mortar fire from Syria

* Coming up: API oil data 4:30 p.m. EDT Wednesday

(Updates prices, adds detail paragraphs 8-9, 11-15)

By Robert Gibbons

NEW YORK, Oct 8 (Reuters) - Oil prices eased on Monday on concerns that slower economic growth in China and the debt crisis in Europe will curb demand for petroleum, while the potential for Middle East turmoil to disrupt supplies limited losses.

Crude futures encountered pressure when the World Bank cut its economic growth forecasts for East Asia and the Pacific region and said there was a risk the slowdown in China, the global No. 2 oil consumer, could be deeper and more prolonged than expected by many analysts.

China's economic growth and demand for petroleum have been key supports for oil prices since global energy demand was hit by recession after the financial crisis in 2008.

Worries about Spain and Europe's debt crisis continued even as euro zone officials gathered in Luxembourg to launch the region's bailout fund. The euro retreated from a two-week peak against the dollar and yen.

The concerns about Asia weighed on global and U.S. equities.

More exchanges of fire between Turkey and Syria on Monday and better-than-expected German export data helped limit oil market losses, analysts and brokers said.

"The situation between Turkey and Syria and some German export data, that was unexpectedly supportive, helped pull prices off lows hit because of concerns about China's slowing and Europe's debt crisis," said Phil Flynn, analyst at Price Futures Group in Chicago.

Brent November crude slipped 24 cents to $111.78 a barrel by 1:43 a.m. EDT (1743 GMT), recovering after falling to a session low of $110.54. Monday's $112.24 peak briefly put prices above the 200-day moving average of $112.15, a technical level closely monitored by chart-watching traders.

U.S. November crude was down 47 cents at $89.41 a barrel, having slipped as low as $88.21. U.S. crude needs a settlement in the black to put prices back above its 100-day moving average of $89.88, which also was Friday's settlement.

Brent's premium to U.S. crude neared $23 a barrel intraday on Monday. Middle East conflicts and delays in the October loading of North Sea Forties cargoes have helped push Brent's premium to its highest since October 2011.

Total crude trading volume was light, with Brent turnover 29 percent below its 30-day average and U.S. dealings 51 percent below their 30-day average.

U.S. RBOB gasoline fell more than 1 percent, while U.S. heating oil, the benchmark distillate futures contract, eased less than half a percent.

Monday's Columbus Day holiday for U.S. federal workers will delay weekly oil inventory reports this week. The American Petroleum Institute will release its data at 4:30 p.m. EDT (2030 GMT) on Wednesday, while U.S. Energy Information Administration data will arrive at 11 a.m. EDT on Thursday.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ FACTBOX-Syrian death toll mounts, refugee wave grows: Graphic - Oil in euros: Graphics - Israel/Iran: For a 24-hr Brent crude chart analysis ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> MIDDLE EAST TURMOIL

Turkish President Abdullah Gul said on Monday the "worst-case scenarios" were now playing out in Syria. Gul said Turkey would to do everything necessary to protect itself, while its army fired back for a sixth day after a shell fired from Syria flew over the border.

Syrian forces advanced into the rebel-held Khalidiya district in the central city of Homs for the first time in months, rebels in the neighborhood said. Forces fighting rebels seeking to topple President Bashar al-Assad have been bombarding 12 districts of the besieged Homs for four days.

"The ongoing shelling of Turkey by Syria is also fuelling concerns about the conflict in Syria spreading to the neighboring 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.

Iran's dispute with Israel and the West over Tehran's nuclear program also continues to limit oil price losses.

Iran on Monday derided Israel's air defenses as feeble, citing a drone incursion into Israeli airspace, but Tehran did not say it had sent the aircraft shot down by the Israelis at the weekend.

Iran also accused Israel and others of masterminding what it said was a cyber attack on communication networks on Iranian offshore oil and gas platforms in the past few weeks.

(Additional reporting by Alice Baghdjian and Christopher Johnson in London and Florence Tan and Manolo Serapio Jr in Singapore; Editing by Bob Burgdorfer)

((robert.gibbons@thomsonreuters.com)(+1 646 223 6059)(Reuters Messaging: robert.gibbons.reuters.com@reuters.net))

Keywords: MARKETS OIL/