* U.S. crude, distillates stocks rise - EIA
* Prices in range between $75-$85 a barrel
* Weather risk still a factor
(Updates prices, recasts lead, adds Euro zone data)
By Emma Farge
LONDON, Jan 14 (Reuters) - Oil rose to near $80 a barrel on
Thursday after dipping to a 2010 low the previous day as
expectations for rising demand growth in the world's top energy
consumer the United States shored up prices.
U.S. economic activity was at a low level but is showing
signs of modest improvement, the Federal Reserve said on
Wednesday, in remarks seen as reinforcing the view that oil
demand will grow in 2010. []
U.S. crude for February <CLc1> rose 32 cents to $79.97 a
barrel by 1313 GMT, after touching a 2010 low of $78.37 on
Wednesday. ICE Brent crude for February <LC0c1> rose 16 cents to
$78.47 a barrel ahead of its expiry later today.
"Sentiment is positive. The driver still remains the pick-up
in the macroeconomic outlook and people will be looking for
wider signs of recovery," said oil analyst Amrita Sen at
Barclays Capital.
Oil prices rallied to 15-month highs of nearly $84 a barrel
earlier this week as freezing weather across much of the
northern hemisphere boosted heating demand. Prices then fell
partly on the back of surprise jump in U.S. distillate stocks
and a rise in crude oil inventories.
Some traders chose to take advantage of Wednesday's price
dip by covering short positions and this also helped to boost
prices back to near $80 a barrel on Thursday, analysts said.
"Prices are moving in a $75-$85 range. It was very good
timing to buy back the market," said Ken Hasegawa, a commodity
derivatives manager at brokerage Newedge in Japan.
WEATHER RISK
Oil stockpiles both on land and floating tankers have
swelled over the past 18 months as the economic crisis cut
energy demand but the recent bout of cold weather has drawn them
down.
Although Wednesday's U.S. stock draws were less than
expected, analysts said cold weather jitters could still play a
role in sustaining prices near $80 a barrel.
"It's still winter and this is still a supporting factor as
weather is a wild card," said Sen.
Forecasts showed higher-than-normal temperatures in the U.S.
Northeast over the coming week, signalling that heating fuel
demand will remain lower than normal. However, unseasonably cold
weather conditions in Europe will keep heating oil demand "above
average" levels, forecaster Meteorlogix said on Thursday.
Investors will later on Thursday also look to wider economic
data for further signs that demand is recovering.
Euro zone industrial production rose twice as much as
expected by 1 percent in November from the previous month.
[]
Later on Thursday, the top U.S. futures regulator will
unveil long-awaited proposals aimed at barring manipulators from
high-flying energy markets, but the agency is expected to tread
lightly with its new regulations, at least initially.
[]
The Commodity Futures Trading Commission is expected to make
a decision on whether to adopt a proposed rule on position
limits in energy markets at 1800 GMT.
The European Union's nominee for chief financial watchdog
said on Wednesday that speculation in commodity derivatives has
been "scandalous" and needs to be regulated carefully.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by William Hardy)
