* Middle East fighting continues
* Russia-Ukraine gas dispute unresolved
(Updates prices, adds detail throughout, updates timeline from
previous LONDON)
By Edward McAllister
NEW YORK, Jan 2 (Reuters) - Oil prices rose more than 3
percent on Friday in thin post-holiday trade as U.S. stocks
extended a rally to a two-week high, fighting intensified in
Gaza and the Russia-Ukraine gas dispute continued.
U.S. light, sweet crude <CLc1> jumped $1.44 to $46.04 a
barrel by 1158 EST (1658 GMT), having earlier touched a low of
$41.05.
London Brent <LCoC1> rose $1.24 to $46.83 a barrel.
OPEC has committed to a 2.2-million-barrel-per-day cut to
be implemented by Jan 1. to help stem the tumble from the
record $147 oil price seen in July last year.
"The OPEC cut and Saudi resolve may have put a bottom in.
But this Russia-Ukraine thing is definitely a concern to
European supplies," said Tom Bentz at BNP Paribas Commodity
Futures Inc.
Oil markets have been watching the dispute between the
world's biggest non-OPEC oil exporter, Russia, and its
neighbors over natural gas supplies [].
Russia shut off gas to its neighbor Ukraine on Thursday,
after a contract dispute, but said it had increased supplies to
other European states to try to reassure its premium-paying
customers.
Fighting continued in the Middle East between Israel and
Hamas, with Palestinian Islamists vowing to avenge the death of
a senior Hamas leader []. The market is watching
closely to see if the fighting spreads to other areas of the
Middle East.
U.S. stocks started 2009 by extending their recent rally to
a two-week high on Friday on hopes that the worst of the market
rout was over. []
In addition, fog closed the ship channel to the refining
and petrochemical center at Lake Charles, Louisiana, on Friday,
stalling four inbound vessels, the U.S. Coast Guard said.
[]
Oil prices fell 54 percent as a whole in 2008, from $95.98
to $44.60 a barrel at the close on Dec. 31, with the spike to
$147.27 set on July 11 in between. As demand dissolved in the
wake of a global economic recession, prices were hammered in
the closing months of the year.
On the last trading day of 2008, prices surged 14 percent
after weekly U.S. data showed a decrease in refinery activity
and an unexpected 500,000-barrel rise in crude stocks in the
world's biggest oil consumer.
Refined product inventories also rose, though less than
analysts expected. Gasoline stockpiles were up 800,000 barrels,
versus a forecast of 1.5 million barrels, while distillates
rose by 700,000 barrels, versus an expected 1.1 million
barrels. []
"The recent crop of demand-side indications for oil has
been rather ambiguous. In itself, that is something of a
change, given a fairly long period during which the demand side
numbers have been weakening fairly consistently," Barclay's
Capital wrote in a note to investors.
(Additional reporting by Robert Gibbons in New York,
Christopher Baldwin in London and Chua Baizhen in Singapore;
Editing by Christian Wiessner)
