* Dollar index weakens, U.S. stocks rise
* Analysts raise oil price forecasts in Reuters poll
* Nigerian rebels reinstate ceasefire in Niger Delta
(Updates prices, adds details of Reuters price poll)
By Alex Lawler
LONDON, Oct 26 (Reuters) - Oil rose above $81 a barrel on
Monday, rebounding from an earlier decline, as a falling U.S.
dollar and gains in U.S. equities outweighed a weak oil supply
and demand picture.
The dollar weakened against a basket of currencies, making
oil cheaper for holders of other currencies. U.S. stocks opened
higher after a sell-off in the previous session.
"The financial market environment is still supportive for
oil prices despite still weak fundamental data," said Carsten
Fritsch, analyst at Commerzbank.
U.S. crude for December delivery was up 99 cents to $81.49
by 1420 GMT, having earlier fallen to as low as $79.57. It
reached a 2009 high of $82.00 on Oct. 21. Brent crude <LCOc1>
rose $1.06 to $79.98.
The dollar fell to a 14-month low against the euro. A
Chinese report saying Beijing should increase its holdings of
euros and yen in its foreign reserves knocked the U.S. currency.
U.S. crude oil was expected to average $74.00 a barrel in
2010, a Reuters poll showed on Monday, as almost one third of
analysts surveyed increased their forecasts on the back of a
stronger economic outlook.
For a graphic showing the Reuters oil price poll, click
here: http://graphics.thomsonreuters.com/109/CMD_OILPL1009.gif
$85?
Goldman Sachs said the near 10 percent jump in prices over
the last two weeks was due to a rebound in diesel demand, and
backed a view prices will hit $85 a barrel before 2009 is out.
China was again the bright spot for the global economic
outlook, following comments by Vice Premier Li Keqiang that the
country's economic recovery has consolidated after having
performed better than expected.
Its strong economic growth was reflected in a 12.5 percent
year on year jump in implied oil demand, the sixth rise in a row
and first double-digit growth since August 2006. []
The earnings season continues this week, offering more clues
about the strength of economic recovery.
Verizon Communications Inc reported third-quarter revenue
that rose from a year earlier but profit that fell as costs
increased [].
Oil rallied despite potentially bearish near-term supply
developments. Nigeria's main militant group reinstated a
ceasefire on Sunday in the oil-producing Niger Delta to allow
for peace talks. []
The oil price rally has caused some concern within the
Organization of the Petroleum Exporting Countries, prompting
some officials to raise the prospect of raising its oil output.
OPEC will lift supply to protect the global economic
recovery at a meeting in December if oil prices rise to $100,
Jose Botelho de Vasconcelos, the group's president, said on
Sunday. []
(Additional reporting by Fayen Wong; editing by James Jukwey)
