* Brent set to see record-high annual average near $111
* Iran closure of strait seen as low probability
* U.S. oil, distillates stocks climb unexpectedly (Recasts, adds Petroplus)
By Emma Farge
LONDON, Dec 30 Brent oil fell below $107 a barrel on Friday, pressured by doubts that Iran will disrupt supply and by an expected drop in European demand for crude due to refinery outages, although the benchmark was still on track to post a 13 percent gain for 2011.
Brent is poised to close the year at a record-high average of around $111 a barrel, surpassing the previous annual peak of just below $100 reached in 2008. With the exception of 2008, oil prices have closed higher every year for the last decade.
The benchmark fell by $1.21 to $106.80 a barrel by 1316 GMT in the final trading day of 2011. U.S. crude was down 68 cents at $98.97 a barrel by the same time.
Iran will fire long-range missiles during a naval drill in the Gulf on Saturday, a semi-official news agency reported, a show of force as Iran has threatened to close shipping lanes if the West imposes sanctions on its oil exports.
"As for relations with Iran, further saber rattling seems like a good bet ... beyond that, however, we remain of the opinion than an actual supply disruption remains a low probability," said Citigroup's Timothy Evans in a research note.
Petroplus, Europe's largest independent oil refiner, will have to shut at least two of its five European refineries in France and Belgium early next week unless it can find new crude supplies, cutting demand for crude by nearly 200,000 barrels per day.
The Swiss refiner has struggled to source crude supplies after lenders on Tuesday froze a $1 billion credit facility used to buy oil.
Signs of comfortable winter oil stocks in the world's top oil consumer also weighed on prices, analysts said.
U.S. crude oil inventories and distillate stocks both climbed unexpectedly last week, according to weekly inventory data from the U.S. Energy Information Administration released on Thursday.
Analysts polled by Reuters expect slightly lower oil prices of $105 a barrel in 2012 as forecasters such as the West's oil watchdog, the International Energy Administration, expect global demand to decelerate in 2012 due partly to the impact of the euro zone debt crisis.
Chinese factory activity shrunk in December as demand slackened, indicating a possible slowdown in growth in the economies responsible for the lion's share of global oil demand.
Another factor to watch will be the pace of economic recovery in the United States.
New U.S. claims for jobless benefits rose last week, but the underlying trend pointed to an improving labour market, while regional factory data showed the world's largest economy gaining momentum as the year ended.
"When traders get back to the market, they will be focused on the recovery in the United States. As the number one consumer, that may override the demand destruction we are seeing in India, China and Japan," Barratt said. (Reporting by Emma Farge and Randy Fabi in Singapore, editing by Jane Baird)
Our top photos from the last 24 hours.