* Cold weather, geopolitical concerns lift oil futures
* Reuters oil poll shows higher price estimates
* Coming up: API oil inventory data, 4:30 p.m. EST Tuesday
(Recasts, updates with settlement prices and market activity)
By Robert Gibbons
NEW YORK, Nov 29 (Reuters) - Oil prices surged on Monday as
Europe's cold weather and hopes for better consumer demand
lifted refined products futures and along with geopolitical
worries offset the dollar's rise and fears the Ireland bailout
plan might not keep Europe's debt woes contained.
Cold temperatures in Northeast and Northwest Europe
[], provided a boost to London gas oil <LGOc1> and
U.S. heating oil <HOc1> distillate futures as the U.S. December
refined products contracts neared their Tuesday expiration.
A shut arbitrage between Europe and the United States and
tight supplies in the New York Harbor region provided lift to
U.S. gasoline futures <RBc1>. []
U.S. crude oil for January delivery <CLc1> rose $1.97 to
settle at $85.73 a barrel, reaching $85.90 in post settlement
trade.
U.S. prices have been above $80 since Oct. 20 and have
seesawed after reaching a 25-month peak at $88.63 on Nov. 11.
The price jump came as total crude trading volume remained
tepid after last week's holiday and shortened sessions. On
Monday volume was 496,077 lots with less than an hour of
trading remaining, 20 percent below the 30-day average.
In London, ICE January Brent crude <LCOc1> rose $1.76 to
settle at $87.34 a barrel.
Strong "Black Friday" U.S. retail sales suggesting revived
consumer buying and expectations for strong online buying
boosting demand for trucking and other delivery transportation
had some analysts pointing to improving fundamentals for oil.
"The southern European sovereign debt crisis would have to
take a severe turn for the worse to derail positive commodity
price trends that are finding strong support from improving
fundamentals and positive market sentiment towards growth
assets," Barclays Capital analysts said in a report.
A Reuters oil poll showed most analysts revising price
estimates higher [], while a Reuters survey of OPEC
showed slightly better compliance with production target
limits. []
GEOPOLITICAL RISKS
South Korea's President Lee Myung-bak said the South would
retaliate against any further provocation by North Korea,
helping keep the simmering geopolitical factor in focus.
[]
The leaked U.S. diplomatic cables revealing Saudi Arabia's
King Abdullah urging the United States to attack Iran's nuclear
installations added to bullish geopolitical concerns.
[]
EURO ZONE WORRIES AND DOLLAR STRENGTH
The European Union endorsed an emergency loan package of 85
billion euros ($115 billion) to help Ireland. []
The dollar index <.DXY> strengthened and the euro fell to a
two-month low against the dollar, with more weakness expected
as investors were unimpressed with the Irish rescue package and
fearful that the problems would spread. []
"The dollar has strengthened against the euro, but it's
foundation is being undermined by the Fed's bond purchase
program. It seems like today the smart money was putting on the
under-the-mattress trade, meaning buy hard assets and sort it
out later," said John Kilduff, partner at Again Capital LLC in
New York.
Federal Reserve bond purchases and safety bids tied to
concerns about the euro zone helped U.S. Treasury bonds rally
[] and fund and broker sources said attracted
investment as a hard asset alternative to currencies.
A stronger dollar typically pressures oil prices as it
boosts the value of greenbacks paid to producers for
dollar-denominated oil while making it more expensive for
consumers with other currencies.
(Additional reporting by Gene Ramos in New York, Christopher
Johnson and Dmitry Zhdannikov in London and Alejandro Barbajosa
in Singapore;editing by Sofina Mirza-Reid)
