UPDATE 6-Brent falls below $112 as OPEC leaves target unchanged

Joshua Franklin
Wednesday, 4 Dec 2013 | 9:55 AM ET

* OPEC leaves output target for first half of 2014 unchanged

* Keystone XL pipeline may relieve Cushing supply bottleneck

* API data showed drop in U.S. stockpiles

* Coming Up: U.S. EIA stockpiles due 1530 GMT

(Updates prices, adds quote, U.S. data)

LONDON, Dec 4 (Reuters) - Brent crude oil slipped below $112 a barrel on Wednesday as OPEC left its output target for the first half of 2014 unchanged, although the U.S. benchmark rose almost $1 to a five-week high.

Brent crude for January delivery was 74 cents lower at $111.88 a barrel at 1438 GMT, after settling $1.17 higher in the previous session. U.S. crude was up $0.79 at $96.83 per barrel, after ending up $2.22 on Tuesday.

The 12-member Organization of the Petroleum Exporting Countries agreed on Wednesday to renew for the first half of 2014 a collective oil production cap of 30 million barrels a day.

This was despite two of its members, Iraq and Iran, having set high output targets for the year ahead.

"This could be storing up tensions for the second half of next year, particularly if Iraq manages to bring more production on than it has this year," said Richard Mallinson, geopolitical risk analyst at Energy Aspects.

"But for the first half of the year, I don't see a pressing need for OPEC to cut back."

Positive data from the United States helped to pare losses. Data showed U.S. private employers added 215,000 jobs in November, topping economists' expectations, and private sector economic activity bounced back in November, lifted by expansion in the services sector.

U.S. crude oil was boosted by data from the American Petroleum Institute (API) showing a drop of 12.4 million barrels in domestic inventories. That snapped a 10-week streak of builds that had added nearly 36 million barrels.

This followed the news TransCanada Corp would begin operations at its Keystone XL pipeline on Jan. 3, allowing stockpiles of crude oil inventories at the Cushing, Oklahoma, oil hub to move to the U.S. Gulf Coast, where a large share of the country's refining capacity is concentrated.

"This is the start of a period of draws in U.S. crude stocks," said Bjarne Schieldrop, chief commodity analyst at SEB Bank.

An inventory report from the U.S. government Energy Information Administration (EIA) is due at 1530 GMT.

A Reuters poll forecast a build of 300,000 barrels.

(Additional reporting by Jacob Gronholt-Pedersen in Singapore; editing by Jason Neely and Keiron Henderson)