* Oil to average nearly $80 in 2010
* Second highest price on record
* Commodities outperformed stocks in 2010
* Positive US data, Chinese comments cited
(Adds quote, updates prices)
LONDON/NEW YORK, Dec 31 (Reuters) - Crude oil was set to close the year
up more than 12 percent despite a slight decline Friday, due to a
resurgence in global demand, an unusually cold winter and falling
inventories.
Crude was also on track to average $79.60 a barrel for the year, second
only to 2008's record average of $99.75.
U.S. crude slipped just below $90 on Friday as year-end profit-taking
outweighed positive economic data and a drawdown in crude inventories
reported in weekly U.S. government data.
U.S. RBOB gasoline futures were higher, buoyed by holiday driving
demand and lower inventories on the last trading day of the year, and
during which refined products futures contracts will expire.
NYMEX crude oil for February delivery <CLG1> fell 71 cents, or 0.79
percent, to $89.13 a barrel at 9:30 a.m. EST (1430 GMT) on Friday. ICE
Brent crude <LCOc1> fell 84 cents to $92.25.
"If crude continues lower, then I reckon it will be some more longs
exiting. I think it's going to be tough to push the market either way, but
bulls will try to push above $90 and they might try it towards end of
session," said Michael Korn, President, Skokie Energy in Princeton, New
Jersey.
Strong demand for raw materials, especially in China, is expected to
push oil even higher next year, analysts said, although cautioning the
global recovery was still fragile.
U.S. crude stocks fell for the fourth straight week last week, but the
drawdown was less than expected and put downward pressure on prices.
But the fall in gasoline stocks was much bigger than expected on
year-end holiday travel demand, possibly signaling
rising consumption as the world's largest economy recovers from recession.
"The latest U.S. weekly data release show a continuation of the recent
strength in oil demand," said analysts at Barclays Capital in a research
note.
"December is set to be the strongest month of the year in demand terms,
with particularly strong indications of gasoline demand," they added.
Including all products, the total US implied demand has risen to the
highest level of the year and above the levels of 2008, said Olivier Jakob
from Petromatrix.
It was, however, soaring demand in Asia that analysts said contributed
most to healthy gains in oil and commodities in 2010. Prices in metals and
soft commodities also beat records or climbed near multi-year highs.
Chinese President Hu Jintao said Friday the global recovery would
remain difficult but China would work to ensure that its economic growth is
stable and fast next year.
The Reuters-Jefferies CRB index of 19 commodities is up 16 percent on
the year, a more attractive return than on stocks.
However, some analysts have cautioned against excess optimism about a
continuation of the rally in 2011.
"Some positive economic news from the U.S. (such as the recent decline
in initial jobless claims) at year ending should not outshine how fragile
the global economic recovery is," said analysts at JBC Energy.
OPEC SUPPLIES
Even with crude stocks slipping for four straight weeks and prices
peaking at a 26-month high of $91.88 a barrel earlier this week, OPEC
output has risen only slightly in December as Nigerian supply has
increased, a Reuters survey found.
Core OPEC ministers have indicated they would not provide more oil
supplies to arrest the oil rally, saying $100 crude was a fair price.
"With non-OPEC production growth expected to slow down to some 420,000
barrels per day next year, OPEC should face the welcomed opportunity to
bring on stream substantial additional volumes," JBC Energy said.
"This is particularly true for the second half of 2011, when we project
the demand for OPEC crude to average clearly more than 30 million barrels
per day," it added.
(Reporting by Randi Fabi in Singapore, Dmitry Zhdannikov in London and
Selam Gebrekidan and Jeffrey Kerr in New York )
