Oil rose above $112 a barrel on Tuesday after Japan pledged to pump more money into its economy, adding to positive growth signals from the United States and China, the world's top oil consumers.

Japan's central bank announced its most determined effort yet to lift the country out of economic stagnation, saying it would expand asset purchases and double its inflation target to 2 percent.

China is on track to recover from its longest growth slowdown since the global financial crisis, while data from the United States has improved.

Brent crude climbed 42 cents to $112.13 a barrel by 1303 GMT, while U.S. crude was off 6 cents from Friday at $95.50.

"Oil and most commodity markets are starting the shortened U.S. trading week higher after the Bank of Japan came out with an aggressive monetary program after over 20 years of going nowhere," said Dominick Chirichella, of New York's Energy Management Institute.

"A stronger Japan is good for the global economy," Jeremy Friesen of Societe Generale in Hong Kong said.

Japan, which has the world's third-biggest economy, is still deciding whether to restart all its nuclear reactors after an earthquake in 2011 caused meltdowns and an explosion at the Fukushima plant.

In China, analysts at Barclays Capital said they expected the world's second-largest oil consumer to post stronger demand of 460,000 barrels per day (bpd) in 2013, up from 330,000 bpd last year.

"The strength of fourth-quarter demand partly reflects the start-up of new refining capacity and a surge in product exports as well as better domestic demand for gasoline and diesel, plus lower fuel oil imports to feed small local refiners," Barclays analysts said in a note.

"We expect all these issues to be important in 2013, although the recent pace of year-on-year growth in oil demand of almost 800,000 bpd will not be maintained."


Broader economic optimism in global markets and worries about supply disruption in the Middle East and North Africa have lifted oil prices at the start of the year, although investors remain cautious as a deadline for an agreement on the U.S. debt level draws near.

A confident President Barack Obama kicked off his second term on Monday with an impassioned call for a more inclusive America.

Algeria's prime minister accused a Canadian of coordinating last week's raid on a desert gas plant, in which 38 mostly foreign hostages were killed, and he pledged to resist the rise of Islamists in the Sahara.

But executives and analysts said investment in the country's oil and gas sector may fall as concerns about the costs of security after the bloody siege eclipse the impact of a hydrocarbon law designed to win over foreign firms. (Additional reporting by Florence Tan; editing by James Jukwey and Jane Baird)