* Dollar index hits 8-month low, weakness lifts oil
* China manufacturing data boosts oil, copper
* Coming up: U.S. pending home sales, 10 a.m. Monday
(Recasts, updates with settlement prices, market activity)
NEW YORK, Oct 1 (Reuters) - Oil prices rose 2 percent on
Friday, posting their best percentage weekly gain in nearly
7-1/2 months as the dollar slumped and China posted strong
economic data.
Oil investors shrugged off mixed U.S. economic data,
including a report showing the pace of growth in the U.S.
manufacturing sector slowed in September.
U.S. crude for November <CLc1> delivery rose $1.61 to
settle at $81.58 a barrel, just under its intraday peak of
$81.66, a seven-week high.
Oil rose 6.65 percent for the week, its best weekly gain
since prices rose 7.66 percent in the week to Feb. 19. On
Thursday, it closed the third quarter with its largest
percentage gain since the last quarter of 2009.
ICE Brent November crude <LCOc1> rose $1.44 to settle at
$83.75 a barrel.
"The dollar weakness and the belief there will be more
quantitative easing by the Federal Reserve are pushing (crude
oil) prices up," said Gene McGillian, analyst at Tradition
Energy in Stamford, Connecticut.
U.S. DOLLAR SLUMP
The dollar hit a six-month low versus the euro <EUR=> and
the dollar index <.DXY> fell to an eight-month low after the
New York Federal Reserve president said U.S. growth has been
disappointing and that more action by the Fed will likely be
warranted unless the outlook improves. [] []
Gold hit record highs on Friday on the dollar's weakness
and expectations of further U.S. monetary easing [], and
copper rallied to its highest level in more than two years on
the strong Chinese manufacturing data. []
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Graphic of price performance of leading commodities:
http://link.reuters.com/hev36p
Graphic showing its performance vs other assets:
http://r.reuters.com/cek95p
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Data showing revived growth in China's manufacturing sector
lifted oil prices early on Friday. China's official purchasing
managers' index rose to 53.8 in September from 51.7 in August,
well above the median forecast of 52.0 in a Reuters poll of
economists. []
Further support came as a strike at France's top oil port
that has squeezed supplies to refineries entered a fifth day
and spread to other ports, boosting fuel prices across Europe.
[]
Wall Street stock indexes rose on gains in resource stocks,
but investors showed caution after data showed a slowdown in
U.S. manufacturing growth. The Institute for Supply Management
said its index of U.S. factory activity fell to 54.4 last month
from 56.3 in August. []
U.S. data was mixed on Friday. Construction spending rose
unexpectedly in August, while September consumer sentiment
improved slightly but remained at its weakest level in more
than a year. []
"A substantial expansion in risk appetite continues to
drive the bulk of the price strength as the complex continues
to feed off of a weak dollar and a renewed vigor in the
equities that managed to shrug off some negative economic
releases today," Jim Ritterbusch, president at Ritterbusch &
Associates in Galena, Illinois, wrote in a research note.
In the week to Tuesday, money managers increased net long
crude oil positions on the New York Mercantile Exchange,
according to data released by the Commodity Futures Trading
Commision on Friday. []
(Additional reporting by Gene Ramos in New York, Marie-Louise
Gumuchian in London and Florence Tan in Singapore, editing by
Jim Marshall)
