* U.S. economic indicators bolster optimism, oil
* Ireland downgrade lifts dollar, limits crude rise
* Coming up: January U.S. crude contract expires Monday
(Recasts, updates with settlement prices, market activity)
By Robert Gibbons
NEW YORK, Dec 17 (Reuters) - Oil prices rose on Friday in
seesaw trading and posted a weekly gain as supportive U.S.
economic data and gasoline futures combined to offset the
dollar's strength amid renewed concerns about euro zone debt
problems.
Optimism that the U.S. economy is gathering steam was
bolstered by news that the Conference Board's measure of
leading economic indicators rose 1.1 percent in November, the
biggest rise since March and the fifth straight monthly gain.
In a separate report, the Economic Cycle Research Institute
said its gauge of future growth rose to its highest level since
May. []
Refinery snags and expectations for holiday driving demand
boosted U.S. gasoline futures <RBc1>, supporting crude futures
even as heating oil futures <HOc1> ended the day slightly
lower. Heating oil still managed a gain for the week.
U.S. crude for January delivery <CLc1> rose 32 cents to
settle at $88.02 a barrel, bouncing off an $87.01 low but
stalling when it reached an intraday peak of $88.52.
For the week, crude gained 23 cents, or 0.26 percent, ahead
of the January contract's expiration on Monday and after
posting a 1.57 percent loss the previous week.
Prices reached a 26-month high of $90.76 on Dec. 7.
"After the market's rally above $90 it's trying to
consolidate below, waiting for a cue as to whether we're going
to see a year-end sell-off or whether more economic optimism is
going to push crude higher," said Gene McGillian, analyst,
Tradition Energy in Stamford, Connecticut.
Money managers increased their net long crude oil futures
positions to a record high in the week to Tuesday, according to
a weekly report from the Commodity Futures Trading Commision
released late on Friday.
But technicals indicated crude could be set to slip to
$85.41 over the next week, based on its wave pattern and a
Fibonacci retracement analysis. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graph of four-week technical outlook on oil:
http://link.reuters.com/sab72r
Reuters Insider on commodities investment:
http://link.reuters.com/wyk52r
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ICE Brent crude for February <LCOc1>, in front-month
position after January contract's expiration on Thursday, rose
7 cents to settle at $91.67 a barrel, also in choppy trading.
February Brent crude's premium over U.S. February crude was
at $3.07, down from Thursday's $3.58 premium comparing January
contracts which was a seven-month high for the spread.
Oil managed to shrug off weakness in the euro which fell to
a two-week low against the dollar, declining for a second
straight week after a multi-notch downgrade of Ireland's credit
rating. Ratings agency Moody's also put Ireland on a negative
outlook, warning that further downgrades could follow.
A stronger dollar typically pressures dollar-denominated
oil prices as it raises the value of dollars paid to producers
and raises oil prices in markets using other currencies.
While concerns about Europe's debt crisis swirled, fears
were tempered by news that German business sentiment rose to
its strongest level since 1991. []
REFINED PRODUCTS STRENGTH
Sunoco Inc's <SUN.N> unit upset at its Marcus Hook,
Pennsylvania, refinery [] added lift to gasoline
futures already supported by last week's Hovensa LCC's shut
gasoline unit at its St. Croix refinery. []
The U.S. Northeast -- the nation's major heating oil
consuming region -- will turn colder than previously forecast
late next week and into the last week of December, according to
weather data from Point Carbon, a Thomson Reuters company that
does natural gas and power analysis. []
The U.S. January heating oil crack spread, the profit
margin for processing crude into fuel, slipped to $15.88 a
barrel on Friday, But it ended at $16.30 on Thursday, the
highest since ending at $21.54 on Feb. 12, 2009.
Below normal temperatures are forecast to continue in
northern Europe, where ICE gas oil cracks traded above $12 a
barrel intraday on Friday. [] []
(Additional reporting by Gene Ramos in New York, Una Galani in
London and Randy Fabi in Singapore; editing by Jim Marshall)
