UPDATE 2-Oil rises above $81 as weak dollar supports

                                
 * Geopolitical risks also lend support
                                
 * Coming Up; U.S. July unemployment trend index; 1400 GMT
                                
 
                                
 (Recasts, adds details, updates prices, previous PERTH)
                                
 By David Sheppard
                                
 LONDON, Aug 9 (Reuters) - Oil climbed above $81 a barrel on
Monday, extending last week's two percent rise, as weakness in
the dollar continued to provide support, despite doubts about
the strength of the U.S. economy.
                                
 Analysts said the dollar, which is slipping towards a
15-year low against the yen, could, along with geopolitical
tensions in the Middle East, continue to bolster oil prices.
                                
 Prices closed above $80 a barrel last week for the first
time since May.
                                
 "I think technically the market has been on an uptrend for
the last couple of weeks, and that's sustained," said Tony
Nunan, a risk manager with Mitsubishi Corp in Tokyo. "The
dollar's weakening is part of why crude has been strong."
                                
 A weak dollar tends to boost commodities priced in the
greenback as they become cheaper for other currency holders.
                                
 U.S. crude for September delivery <CLc1> rose $1.05 to
$81.75 a barrel by 0958 GMT. The contract fell $1.31 or 1.6
percent to settle at $80.70 a barrel on Friday, but ended the
week 2.2 percent higher.
                                
 London Brent crude <LCOc1> gained $1.15 to $81.31.
                                
 Nunan said U.S. crude may try to scale a recent high of
$82.97 hit earlier this month, but the slow economic recovery in
the United States could keep a lid on the market for now.
                                
  The latest U.S. employment figures on Friday showed the
world's largest economy shed 131,000 jobs in July, more than
twice the forecast drop. [ID:nN05598486]
                                
 
                                
 EYES ON CHINA
                                
 Investors will watch China's trade and industrial output
data due mid-week to gauge how the country's economy is faring,
with the Ministry of Commerce having warned that the second half
of the year would be a "grim" period for its exporters.
                                
 Rising Chinese oil demand has been one of the main factors
pushing prices higher, analysts said, but there are concerns its
rate of economic growth could slow.
                                
 Analysts at Australia & New Zealand Bank said reports of
escalating geopolitical tension in the Middle East could provide
some support to oil prices.
                                
 Iran showed off four new domestically made small submarines
on Sunday that it said would bolster its defence capability as
it vows to confront any military threat from countries opposed
to its nuclear programme. [ID:nLDE6770B1]
                                
 In a sign that many investors remain bullish on oil prices,
open interest positions remained heavy at the September $85, $90
and $95 call options on Friday, while money managers also
increased net long crude oil positions on the New York
Mercantile Exchange in the week through Aug. 3. [ID:nN06679620]
[ID:nN06127438]
                                
 On the weather front, Tropical Storm Colin weakened to a
tropical depression in the Atlantic Ocean on Sunday as it passed
west of Bermuda, the National Hurricane Center (NHC) said,
adding the system could dissipate later in the day.
[ID:nN08221231]
 (Additional reporting by Fayen Wong in Perth and Osamu
Tskukimori in Tokyo; editing by James Jukwey)