* China's December industrial output seen jumping 20
percent
* NYMEX combines trading sessions for U.S. holiday
* Support seen from 50-day moving average
By Alejandro Barbajosa
SINGAPORE, Jan 19 (Reuters) - Oil prices rose above $78 on
Tuesday on expectations that Chinese economic indicators to be
published this week will signal strong demand growth from the
world's second-largest oil consumer.
China's industrial output probably jumped by 20 percent in
the year to December from November's figure of 19.2 percent, a
Reuters survey showed. That would be the fastest pace since
February 2006.
Front-month U.S. crude futures settled on Friday below the
50-day moving average for the first time in three weeks and
bounced back, setting an important support level at $78, said
Mark Pervan, senior commodities analysts at ANZ.
U.S. crude futures for February delivery <CLc1> climbed as
much as 68 cents from Friday's close of $78 and were trading up
25 cents at $78.25 by 0318 GMT. They touched a three-week
intraday low of $77.07 on Monday.
Oil prices are still nearly 46 percent off their July 2008
high of more than $147 a barrel.
NYMEX will combine prices for Monday and Tuesday into a
single trading session because of the Martin Luther King Day
holiday.
"There is growing expectation that the Chinese data will
surprise on the upside," said Pervan from Melbourne, Australia.
"This means a reasonably strong commodities markets and oil is
taking a lead from that."
A weaker dollar encouraged riskier trades in commodities.
"That is also positive for the oil market," Pervan added.
The NYMEX February contract expires on Wednesday. March
futures <CLc2>, the front-month contract as of Thursday, rose
23 cents to $78.60 a barrel.
The dollar <JPY=> was lower at 90.65 yen, hovering near a
four-week low of 90.55. London Brent crude futures for March
delivery <LCOc1> increased 2 cents to 77.12, after trading
little changed on Monday.
A higher-than-expected figure for China's industrial output
could be interpreted as a reason for China's central bank to
tighten monetary policy, especially after it announced higher
reserve requirements last week. []
But the bearish effect of tightening measures on energy
consumption will be more than compensated by sustained strong
economic growth, Pervan said.
The Chinese economic data, including inflation, producer
prices and retails sales, will be published on Thursday.
China's crude oil imports will probably rise 15 percent
this year from 2009 as the country launches the second phase of
its state petroleum reserve, according to China Oil, Gas &
Petrochemicals, a report published by the state-run Xinhua news
agency.
"The next flag for oil prices may be Chinese growth going
stronger that we are thinking," Pervan said.
A moving average is a graph indicator that traders use to
determine potential turning points for prices. It represents
the average settlement price for whatever number of days is
chosen before the current date. The 50-day moving average for
the front month U.S. crude futures contract currently stands at
$78.04.
The International Energy Agency (IEA) says OPEC will
probably decide to hold production steady at its next meeting
in March. The oil market is "pretty well supplied," said IEA
Deputy Executive Director Richard Jones. []
(Editing by Clarence Fernandez)
