* Cold weather hits U.S., Europe, Asia
* Russia resumes oil to Belarus refineries
* U.S. manufacturing sector grows in December-ISM
(Updates prices at settlement, recasts)
NEW YORK, Jan 4 (Reuters) - Oil rose more than $2 to settle
above $81 a barrel on Monday, its highest close in nearly three
months as cold weather battered the United States and other big
consumer regions and drove up demand for heating fuel.
Heating oil futures led the U.S. oil complex higher as U.S.
crude for February delivery <CLc1> settled up $2.15 at $81.51,
its highest close since Oct. 9. Brent crude <LCOc1> climbed
$2.19 to settle at $80.12.
"Cold temperatures in the U.S., part of a global cold
front, and a weak dollar are driving oil prices higher," said
Phil Flynn of PFGBest Research in Chicago.
Frigid temperatures were expected to boost U.S. heating
demand to 21 percent above normal, with consumption in the U.S.
Northeast, the largest heating oil market, seen up 11 percent
above average levels. [] []
This follows the coldest U.S. December in nine years, which
helped boost heating oil prices by nearly 10 percent.
[]
Unusually cold weather in Britain is expected to continue
into the second half of January after the coldest December
since 1995, said the UK's official weather center.
[] Colder temperatures in Europe were seen
gradually spreading from the northeast to southwest during the
next few days, boosting energy consumption. []
Heavy snows and biting cold also hit parts of Asia on
Monday, with unusually harsh winter weather snarling transport
across north China, South Korea and India. []
The dollar slid as investors locked in recent gains ahead
of U.S. economic data this week that could dictate the
currency's direction in the coming months. []
Over the past year, some investors have sold safe-haven
plays such as the dollar and bought oil futures following
positive economic data.
Crude markets have been looking to wider economic data for
signs of a turnaround that could bolster flagging oil demand.
Expectations of a demand rebound helped push up crude prices 78
percent in 2009.
U.S. stocks jumped after data showed a fifth straight month
of expansion in the manufacturing sector and semiconductor
stocks gained on a brokerage upgrade of Intel. []
The Institute for Supply Management said its index of
national factory activity rose for a fifth consecutive month
and neared a four-year high in December. []
Markets were also keeping a close eye on an oil pricing
dispute between Russia and Belarus that briefly cut off
supplies to the Eastern European nation. Russia on Monday said
had resumed supplies to refineries in Belarus, but tensions are
still simmering. []
Belarus officials earlier on Monday warned they may cut
electricity supplies to Russia, ratcheting up tensions in the
dispute that broke out on New Year's Eve and raised the specter
of another winter of supply disruptions for European Union
customers. For a factbox on the pipeline click on
[]
Positive economic data from China and India added to the
bullish sentiment.
China's factories cranked up production in December, while
the rate of growth in Indian manufacturing rose for the first
time in three months in December, surveys showed.
[] []
(Reporting by Matthew Robinson, Edward McAllister, Robert
Gibbons and Gene Ramos in New York; Alex Lawler in London;
Fayen Wong in Perth; editing by Jim Marshall)
