* Mild weather weighs oil prices
* China's December industrial output seen jumping 20 percent
* OPEC trims estimated demand for its oil
(Adds OPEC, update prices)
By Ikuko Kurahone
LONDON, Jan 19 (Reuters) - Oil dipped below $78 a barrel on
Tuesday, extending a losing streak from last week due to an
expected dent in heating demand as northern hemisphere weather
turned milder after a prolonged cold spell.
Producer group OPEC trimmed estimated demand for its oil
this year in its monthly oil report and said oil inventories
remained high enough to cope with any unexpected rise in winter
fuel consumption. []
That followed the International Energy Agency, which said
its monthly report on Friday that the cold spell across major
oil consuming countries had done little to boost heating demand.
But some support came from China, the world's second largest
oil consumer, as its economic indicators were expected to show
strong growth later this week.
Milder weather in the northern hemisphere, good supply and a
fragile demand picture were all influencing prices, said
Christopher Bellew of brokerage Bache Financial.
"However, a key determinant of oil prices is demand from
China and the fourth quarter economic data due out on Thursday
will be an important factor," he said.
U.S. crude <CLc1> fell 11 cents, or 0.2 percent, to $77.89 a
barrel by 1218 GMT. The New York Mercantile Exchange will
combine prices for Monday and Tuesday into a single trading
session because of the Martin Luther King Day holiday.
Brent dropped by 57 cents to $76.53 a barrel.
New York heating oil futures were slipping by a sharper 1
percent. <HOc1>
"Heating oil is leading the market lower," Olivier Jakob
with Petromatrix said. "The weather is still mild in the
States."
Private forecaster DTN Meorologix expected milder weather
than normal for up to next 10 days in many areas in the United
States, including the northeast, the world's largest heating oil
market, after weeks of freezing weather since late December.
[]
In Europe's largest heating market Germany, heating oil
demand fell about 37 percent in December from a year earlier.
[]
CHINA
The market focus will shift to the Chinese economic data,
including inflation, producer prices and retails sales, due out
on Thursday. <ECON.CN>
China's industrial output probably jumped by 20 percent in
the year to December from November's figure of 19.2 percent, a
Reuters survey showed. That would be the fastest pace since
February 2006. []
Higher industrial output can push up oil demand from the
country.
China's crude oil imports will probably rise 15 percent this
year from 2009 as the country launches the second phase of its
state petroleum reserve, according to China Oil, Gas &
Petrochemicals, a report published by the state-run Xinhua news
agency.
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by Keiron Henderson)
