UPDATE 1-Brent rises towards $111 on US demand hopes, limited inventory gain
* U.S. retail sales indicate firmer consumer spending
* World Bank cuts growth outlook as advanced nations drag
* U.S. crude stocks rise less than forecast -API
* Coming Up: U.S. EIA petroleum status report; 1530 GMT
(Adds comment, details on spreads; updates prices)
SINGAPORE, Jan 16 (Reuters) - Brent crude rose towards $111 a barrel on Wednesday after robust U.S. retail sales boosted hopes for stronger demand in the world's top oil consumer, while oil inventories there rose far less than expected.
A solid 0.5 percent rise in December retail sales beat expectations for a 0.2 percent increase, showing consumer resilience even in the face of automatic tax increases and government spending cuts.
That added to evidence of a slow but steady recovery, and investors are now waiting for more data to gauge the global growth outlook.
Brent futures had gained 32 cents to $110.62 a barrel by 0618 GMT. The February contract, which expires later in the day, settled $1.58 lower in the previous session, while the more heavily traded March contract ended down $1.32.
U.S. oil rose 15 cents to $93.43 a barrel.
Prices were also supported by data from the American Petroleum Institute that showed crude stockpiles rose by 46,000 barrels in the week to Jan. 11, compared with an expected 2.3 million barrel rise.
"U.S. retail sales are important data, but not that substantial to trigger a rally in oil prices," said Tetsu Emori, a commodities fund manager at Astmax Investments in Tokyo.
"The market is looking for more positive factors to push prices higher and till then prices will trade in a tight range."
Emori expects Brent to trade between $109 and $111 a barrel, and WTI between $92 and $94 until there is stronger evidence of an improvement in the global outlook.
That could come from China's gross domestic product numbers, due on Friday, which are expected to show the country's annual economic growth quickened to 7.8 percent in the fourth quarter, according to a Reuters poll, snapping seven straight quarters of weaker expansion.
"I think China's economy has bottomed out," Emori said. "The downside risks to China have reduced and the economy is likely to show signs of improving."
Other issues holding back oil prices include concerns over a lack of agreement on the U.S. debt ceiling, Emori said.
Any further evidence of steady recovery in the United States may also help the U.S. contract gain on Brent, keeping the difference between the two benchmarks at less than $20 a barrel and narrowing to $15 by the end of the year, he said.
The spread between the two has narrowed, touching the lowest since September on Jan. 14, following news of the start-up of the expanded Seaway pipeline.
The pipeline aims to ease the glut of crude in the U.S. Midwest, especially at Cushing, Oklahoma, delivery point for the U.S. contract.
Analysts at BNP Paribas expect a strong run in oil prices in the first quarter of 2013, close to the levels they touched in the same time a year ago.
Brent may average $120 in the three months compared with 118.45 a year ago, while U.S. oil may average $105 compared with $103.03, BNP's Harry Tchilinguirian said, attributing the increase to fundamental and technical factors.
Further gains in prices were capped by the World Bank's latest global growth outlook that said a frustratingly slow economic recovery in developed nations is holding back the global economy.
The bank cut its outlook for world growth in 2013, forecasting global GDP up 2.4 percent this year, from 2.3 percent in 2012. In its last forecast in June, it projected global growth would reach 3.0 percent in 2013.
Brent is expected to test support at $109.64 per barrel, with a good chance of breaking this level and falling to $108.77, according to Reuters technical analyst Wang Tao.
U.S. oil is expected to retrace to $92.24.
(Reporting by Manash Goswami; Editing by Tom Hogue and Joseph Radford)