* Restart of U.S. gasoline refinery pressures oil prices
* Blizzard in U.S. Northeast limits oil's decline
* World economy can withstand $100 oil price-Kuwait
(Adds background, updates prices)
By Randy Fabi
SINGAPORE, Dec 27 (Reuters) - Oil steadied near two-year
highs on Monday as uncertainty over Chinese fuel demand growth
following a Christmas Day interest rate hike offset a blizzard
in the U.S. Northeast.
U.S. crude for February <CLc1> nudged three cents lower to
$91.48 a barrel by 0512 GMT, after hitting a 26-month high of
$91.63 the previous session. ICE Brent crude <LCOc1> rose 44
cents to $94.21.
China's central bank raised interest rates on Saturday for
the second time in just over two months as it stepped up its
battle to rein in stubbornly high inflation. []
"China's interest rate hike is having some impact on the
oil markets... because of concerns over how the tightening of
monetary policy will impact demand growth," said Serene Lim,
an oil analyst at ANZ.
When China last raised interest rates in mid-October, oil
tumbled 4 percent. Prices quickly recovered and have since
rallied by around 15 percent on abnormally cold weather in the
northern hemisphere and an unexpected surge in fuel demand.
While markets had expected a rate rise, the timing was a
surprise. Most markets recovered from early losses on
expectations the measures would do little to curb China's
appetite for industrial raw materials, energy, grains and
other agricultural products.
Rising oil prices led China to boost fuel prices by 4
percent earlier this month, but analysts believe the price
hike was too modest to have a significant impact on demand.
U.S. REFINERY RESTARTS
Oil prices also came under pressure from the restarting of
a major U.S. gasoline refinery.
The gasoline-making fluid catalytic cracker at Hovensa
LLC's 500,000-bpd Virgin Islands refinery resumed operations
on Friday after an over two-week unplanned outage.
[]
The unplanned outage contributed to extended tightness in
the New York harbour gasoline market that had helped drive oil
prices higher.
U.S. gasoline futures <RBc1> eased 0.77 cents to $2.4346 a
gallon.
Oil's decline was limited by the first widespread blizzard
of the season in the northeastern United States, the world's
top heating oil market. []
An unusually cold winter in the world's largest oil user
has contributed to a huge depletion of crude stockpiles, which
have fallen at the fastest pace in more than a decade.
Oil's climb has sparked inflationary worries, not only in
China, but also India, South Korea and other major
fuel-importing countries.
However, Kuwait's oil minister said the global economy can
withstand an oil price of $100 a barrel, while other exporters
indicated OPEC may decide against increasing output through
2011 as the market was well supplied. []
Qatar's Minister Abdullah al-Attiyah said he did not
expect OPEC to increase production in 2011. OPEC's next
scheduled meeting is in June.
(Reporting by Randy Fabi; Editing by Manash Goswami)
