Brent steady above $119; U.S., China data supports

U.S. manufacturing growth in April hit its highest level in 10 months, while China's factory sector also expanded last month, government data showed on Tuesday.

A private-sector survey geared towards smaller Chinese firms also showed that manufacturing activity improved in April, but remained below the threshold of 50 that divides expansion from contraction.

The economic data is supporting oil prices, but there will be anxiety ahead of the U.S. jobs report on Friday, so I don't expect any big volatility for the rest of the week, said Gordon Kwan, head of energy research at Mirae Asset Management in Hong Kong.

Prices would be rangebound, with Brent trading between $115-$120 this week, he added.

Brent crude for June slipped 14 cents to $119.52 a barrel by 2:08 a.m. EDT, after settling 19 cents higher at $119.66 on Tuesday. U.S. crude for June was down 30 cents at $105.84.

Asian shares followed Wall Street higher and the dollar recovered against the yen on Wednesday on the strong U.S. factory data.

Market participants will be watching Friday's key nonfarm payrolls report for further evidence of a sustained U.S. economic recovery that is likely to boost oil prices.

Analysts expect hiring by U.S. employers to have rebounded in April, which could ease worries the economy has stumbled into a soft patch. Nonfarm payrolls are expected to rise 170,000 in April, up from a meager 120,000 in March.

Despite the positive data, lingering concerns over the euro zone debt crisis and a slowdown in the Chinese economy continued to weigh on prices, analysts said.

China is a concern, with new loans falling sharply last month. The question is whether the government's easing measures have come in time for a soft landing, said Kwan.

Chinese bank lending is estimated to have dropped 30 percent in April from a month earlier as demand for credit declined, the official China Securities Journal reported on Wednesday.

Debt woes in the euro zone also continued to dampen sentiment, with Spain, the fourth-largest economy in the grouping, sinking into recession in the first quarter.

In the United States, crude oil stocks rose by 2 million barrels last week, the industry group American Petroleum Institute (API) said, less than expected.

Ahead of weekly inventory reports, a rise of 2.5 million barrels for crude, a sixth consecutive build, was forecast in a Reuters survey of analysts.

(Editing by Richard Pullin)