* U.S., Europe cold weather lifts oil demand, prices
* OPEC leaves output targets steady at Saturday meeting
* Coming up: API oil inventory data, 4:30 p.m. EST Tuesday
(Recasts, updates market activity and prices and changes
dateline, previously LONDON)
By Robert Gibbons
NEW YORK, Dec 13 (Reuters) - Oil rose on Monday as strong
Chinese economic data lifted commodities even as the country's
soaring inflation did not lead to an interest rate hike to cool
the economy.
Europe's cold snap and a cold front moving across the U.S.
Midwest into the heating oil-consuming northeast also supported
oil along with the dollar's weakness.
Oil's push above $89 a barrel came after the Organization
of the Petroleum Exporting Countries decided on Saturday, as
expected, to maintain its production policy, and OPEC
heavyweight Saudi Arabia said it still favored oil prices
between $70 and $80 per barrel.
U.S. crude for January delivery <CLc1> rose 73 cents to
$88.52 a barrel at 11:50 a.m. EST (1650 GMT), after posting a
session peak of $89.49. U.S. crude prices reached a 26-month
high of $90.76 on Dec. 7.
Total U.S. crude trading volume was more than 321,000 lots
near midday in New York, 51 percent below the 30-day average.
ICE Brent crude for January <LCOc1> rose 75 cents to $91.23
a barrel, off a $92.30 peak. The January Brent contract expires
on Thursday.
"The complex has begun the week in strong fashion with
support forthcoming from a rebound in the euro and the fact
that China didn't boost interest rates over the weekend," Jim
Ritterbusch, president at Ritterbusch & Associates in Galena,
Illinois, said in a note.
Investor optimism grew after data from China's National
Bureau of Statistics showed industrial output in November
topped expectations, while headline inflation rose to a
28-month high to 5.1 percent.
Investors were concerned last week that inflation worries
in China would lead authorities, who already have hiked lender
reserve requirements, to take stronger measures to cool the
economy in the top source of oil demand growth.
China's implied oil demand in November rose 13.7 percent
from the year-ago period to a record of nearly 9.3 million
barrels per day, Reuters calculations based on preliminary
official data showed. []
Crude oil processing in the world's No. 2 oil consumer hit
a record 8.92 million bpd.
"It's not just oil (that is strong) it is the entire
commodities spectrum," said Carsten Fritsch, an oil analyst at
Commerzbank in Frankfurt, as Tokyo rubber futures and London
copper hit historic highs, while gold also rose.
Copper hit a record high on the strong data from top
consumer China. []
U.S. dollar losses deepened on firmer risk appetite,
year-end positioning and some concerns about strained U.S.
finances. The euro rose 1 percent. []
A deal to extend Bush-era tax cuts also was seen weighing
on the dollar,
Wall Street rose modestly with investor appetite for stocks
lifted by a flurry of merger deals and expectations of
congressional approval of the tax-cut extension. []
COLD WEATHER
Oil prices also have been supported by unseasonably cold
weather in Europe, the United States and parts of east Asia,
boosting heating fuel demand. [] []
U.S. overall heating demand this week is expected to be
13.6 percent above normal, the National Weather Service
forecast Monday. Heating oil demand will average 4.8 percent
above normal, while heating demand for natural gas will average
12 percent above normal, the NWS said. []
OPEC STANDS PAT
Leading OPEC producer Saudi Arabia said on Saturday it
still favored a $70-$80 oil price range,
Saudi Oil Minister Ali al-Naimi told reporters at OPEC's
Saturday meeting in Quito, "$70-$80 is a good price," seemingly
restating a two-year-old policy as OPEC kept output restraints
unchanged despite prices recently topping $90 a barrel.
[]
Naimi had said on Nov. 1 that oil at between $70 and $90
was comfortable for consumers. [] Venezuela and
Libya have since said that $100 a barrel is needed to
compensate for a weak dollar and to maintain investment needed
for new production.
(Additional reporting by Una Galani and Christopher Johnson in
London and Rebekah Kebede in Perth; Editing by David Gregorio)
