* China's oil demand up 8.8 pct in April from a year earlier
* China's April inflation at higher-than-expected 5.3 pct
* U.S. cuts forecasts for 2011 global oil demand growth (Recasts with rising prices, adds analyst comments)
By Alejandro Barbajosa
SINGAPORE, May 11 (Reuters) - Brent crude rose past $118 on Wednesday after a jump in China's implied oil demand to the third-highest level on record showed that Beijing's efforts to cool the economy of the second-largest oil consumer are doing little to dent use.
Brent crude for June
"The bullish data shows that China's oil demand growth is still very much intact," despite the government's tightening measures, said Serene Lim, an ANZ Bank oil analyst based in Singapore.
With the start of the summer U.S. driving season around the corner, investors are focusing on falling inventories of gasoline in the world's top market, paying less attention to rising crude stockpiles.
"U.S. gasoline inventories have been coming off, so we still see healthy demand despite concerns of higher commodity prices slowing consumption," Lim said.
U.S. gasoline stocks fell by 1.8 million barrels in the week to May 6, the American Petroleum Institute said late on Tuesday, versus an expected drop of 200,000 barrels. Inventories are now nearly 11 million barrels below levels this time last year.
Robust demand growth in China is also helping allay concerns of a deteriorating outlook for consumption in top consumer the United States.
Oil prices will stay firmly above $100 a barrel for the rest of the year despite last week's correction and might even target new highs as supplies remain tight and developing economies grow, a Reuters poll showed. [ID:nLDE7451PZ]
"The crude market has some place for prices to go higher," Lim said.
CHINA'S IMPLIED OIL DEMAND
China's implied oil demand, a combination of crude oil throughput and net imports of refined oil products, was at 9.32 million barrels per day (bpd) last month, Reuters calculations showed, up 8.8 percent from a year earlier. [ID:nL3E7GB0AP]
The jump in demand came even as the country's industrial output growth in April missed expectations with a slight slowdown to 13.4 percent on the year from a pace of 14.8 percent in March, the National Bureau of Statistics said on Wednesday.
China's inflation eased a touch to 5.3 percent in the year to April from a 32-month high of 5.4 percent in March but was still higher than expected, keeping the door open for more tightening steps. [ID:nL3E7GB06W]
Demand elsewhere, especially in developed economies, may not be as resilient to high prices.
The U.S. government late on Tuesday cut its projection for world oil demand this year by the most in 10 months, as crude prices well over $100 a barrel are starting to take a bite out of consumption. [ID:nN10109808]
The U.S. Energy Information Administration's 120,000 barrel per day (bpd) reduction in its 2011 demand growth forecast is the latest sign that analysts are factoring in less fuel use as a result of gasoline and jet fuel prices approaching 2008 peaks.
OPEC and the Paris-based Energy Information Administration will release their reports later this week.
More than half the reduction was due to lower than expected fuel use in the U.S., where 2011 oil demand will grow by only 130,000 bpd, the EIA said its Short-Term Energy Outlook. A month ago the agency had predicted growth of 210,000 bpd.
API data showed U.S. crude stockpiles rose 2.9 million barrels last week, compared with a forecast of a 1.4 million-barrel gain in a Reuters poll, helped by higher imports.
U.S. government data on oil inventories and demand from the EIA will follow later on Wednesday.
In Japan, commercial crude inventories rose 6.9 percent last week, reflecting a lower refinery utilisation rate following weak product sales after a devastating earthquake hit northeast Japan in March, hurting consumer sentiment. [ID:nL3E7GB0IG] (Editing by Clarence Fernandez)