* China manufacturing PMI rose in August
* Technicals show oil may hit $81 []
* Coming Up: U.S. Sept ISM; 1400 GMT
(Adds comment, updates prices, PVS SINGAPORE)
By Marie-Louise Gumuchian
LONDON, Oct 1 (Reuters) - Oil rose back above $80 on Friday
to a seven-week high after stronger-than-expected U.S. and
Chinese economic data raised hopes of demand recovery in the
world's largest consumers.
China's manufacturing sector gathered momentum last month,
the official purchasing managers index (PMI) number showed,
providing further evidence that the economy is pulling smoothly
out of a second-quarter swoon. []
U.S. crude for November <CLc1> rose 57 cents to $80.54 a
barrel at 0821 GMT, adding to an 11.2 percent gain in September,
the largest monthly jump since May 2009. It earlier touched
$80.76, its highest level since around mid-August. ICE Brent
<LCOc1> for November was up 40 cents at $82.71 a barrel.
"The China PMI data shows that the manufacturing sector is
accelerating and will result in stronger oil demand," said
Michelle Kwek, an analyst at Informa Global Markets. "This has
boosted sentiment and kept oil prices supported."
China's financial markets are closed for a week from Oct. 1
to 7 for the National Day holiday.
In the United States, data on Thursday showed new jobless
claims fell last week, regional manufacturing grew faster than
expected and consumer spending was stronger than expected.
[]
The market will be watching out for the Institute for Supply
Management U.S. September manufacturing index, due later on
Friday. Economists in a Reuters survey expect a reading of 54.5
versus 56.3 in August.
"Any return to stronger numbers - or a better-than-expected
set of figures - would bring in more buying, we would expect,"
Peter Beutel, president of U.S. trading advisory Cameron
Hanover, said in a note.
RELATIVELY STABLE PRICES
Oil prices have remained relatively stable so far this year,
trading two-thirds of 2010 between $70 and $80 per barrel, a
range that oil producers in the Organization of the Petroleum
Exporting Countries have said they favour.
U.S. oil <CLc1> may edge up to $81 per barrel and then start
a correction to as deep as $78 based on an ascending trendline.
[]
"In the short term ... probably yes (price above $80 is
sustainable) given bullish market environment momentum, a weaker
dollar, technicals and the latest economic news from China,"
Carsten Fristch at Commerzbank said.
"But in the mid to long term, meaning next month or so,
probably not as the fundamentals don't justify prices beyond $80
at the moment. They haven't really changed only market sentiment
has changed."
The oil market has spent much of the year in lockstep with
equities and negatively correlated to the U.S. dollar.
The dollar was down 0.33 percent against a basket of
currencies. A weaker dollar increases the purchasing power of
non-U.S. dollar currency holders. The pan-European FTSEurofirst
300 <> index of top shares was 0.51 percent higher.
The market is also watching Ecuador, an OPEC member country
which typically exports around 300,000 barrels per day of crude,
after Thursday's military and police protests thrust the country
into political unrest.
Ecuador's state oil company Petroecuador said on Thursday
its operations had not been affected by political unrest and
that the army was reinforcing security at its oil fields.
[] []
(Additional reporting by Florence Tan in Singapore)
