* Dollar index hits 8-mth low
* China manufacturing gathers steam in September
* Coming Up: U.S. Sept ISM; 1400 GMT
(Recasts, updates prices)
By Marie-Louise Gumuchian
LONDON, Oct 1 (Reuters) - Oil rose on Friday to above $81, a
seven-week high, boosted by a weaker dollar and
stronger-than-expected Chinese economic data which raised
prospects of demand recovery in one of the largest consumers.
U.S. crude for November <CLc1> was up $1.26 at $81.23 a
barrel at 1300 GMT, having hit $81.40, its highest level since
around mid-August. ICE Brent <LCOc1> for November was up $1.14
at $83.45 a barrel.
"The main driver has been the euro with a lot of bullish
news back behind it," Rob Montefusco, a trader at Sucden
Financial, said.
The dollar accelerated losses against the euro on Friday
after New York Federal Reserve Bank President William Dudley
said more Fed action is warranted unless the U.S. economic
outlook improves. []
A weaker dollar increases the purchasing power of non-U.S.
dollar currency holders.
Data showed U.S. consumer spending rose slightly more than
expected in August, but inflation remained subdued.
[]
In China, the country'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. []
"(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.
UPWARD PRESSURE
In oil producer Nigeria, eight people were killed and three
injured in car bomb explosions that hit the capital near a
parade marking the 50th anniversary of independence, police
said. []
In France, a strike at a top oil port that has squeezed
supplies to refineries entered a fifth day on Friday, with
unions aiming to escalate protests with a call for a national
stoppage at all French ports. []
Meanwhile, officials said Indonesia's crude oil production
has been cut by 150,000 barrels per day (bpd) after a gas
pipeline leak that will take three days to fix, cutting output
from Chevron's <CVX.N> Minas and Duri fields. []
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. []
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."
(Additional reporting by Florence Tan in Singapore; editing by
James Jukwey)
