UPDATE 5-Oil jumps to $81 on China, U.S. data

                                
 * China manufacturing gathers steam in September
                                
 * Coming Up: U.S. Sept ISM; 1400 GMT
                                
 
                                
 (Adds IEA, updates prices)
                                
 By Marie-Louise Gumuchian
                                
 LONDON, Oct 1 (Reuters) - Oil rose on Friday to $81, a
seven-week high, boosted by stronger-than-expected U.S. and
Chinese economic data which 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) showed, providing
further evidence that an important engine of global growth is
humming again after sputtering in the second quarter.
[ID:nTOE68T090]
                                
 U.S. crude for November <CLc1> was up $1 at $80.97 a barrel
at 1116 GMT, adding to an 11.2 percent gain in September, the
largest monthly jump since May 2009. It earlier hit $81.08, its
highest level since around mid-August. ICE Brent <LCOc1> for
November was up 89 cents at $83.20 a barrel.
                                
 "(The data is) indicating that we've had no slowdown in
recent economic activity so that's very supportive, because
China is the main source of growth for oil demand in the
foreseeable future," Christophe Barret, oil analyst at Credit
Agricole, said.
                                
 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.
[ID:nN30285244]
                                
 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.
                                
 
                                
 UPWARD PRESSURE
                                
 The International Energy Agency, which advises
industrialised nations on energy policy, said on Friday it sees
upward pressure on oil prices in the second half of 2011 due to
a projected decline in oil stocks. [ID:nWEB6049]
                                
 Oil prices have remained relatively stable so far this year,
trading two-thirds of 2010 at between $70 and $80 per barrel, a
range that oil producers in the Organization of the Petroleum
Exporting Countries have said they favour.
                                
 "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 0.59 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 <.FTEU3> index of top shares was 0.29 percent higher.
 (Additional reporting by Florence Tan in Singapore; editing by
James Jukwey)