* Euro zone readies giant rescue package for Greece
* U.S. dollar index <.DXY> falls as euro strengthens <EUR=>
* China's March crude imports surge despite higher prices
(Updates throughout, changes dateline, pvs PERTH)
By Christopher Johnson
LONDON, April 12 (Reuters) - Oil prices rose above $85 a
barrel on Monday, buoyed by a drop in the U.S. dollar and
bullish data that showed Chinese crude imports jumping to their
second-highest monthly level in March.
Euro zone finance ministers approved a giant 30 billion euro
($40 billion) emergency aid mechanism for debt-stricken Greece
on Sunday but stressed Athens had not requested the plan be
activated yet. []
The news drove the euro to its highest levels in nearly a
month in Asian trade, while the dollar index fell 0.8 percent
against a basket of currencies on Monday.
U.S. crude for May delivery <CLc1> was up 60 cents to $85.52
a barrel by 0738 GMT, trimming an earlier 79 cent gain. London
Brent crude <LCOc1> rose 80 cents to $85.63.
A weaker dollar can support oil prices, making commodities
denominated in dollars cheaper for other currency holders.
"Two factors are supporting oil: the weaker dollar after the
support agreed for Greece, and the very strong import data from
China," said Eugen Weinberg, commodity analyst at Commerzbank.
"China is the most important dynamo behind the movement of
commodities at the moment as it is the biggest source of
demand," he added.
China's strong demand for oil and copper showed no let-up in
March, with imports rising rapidly despite higher prices as
factories returned to work in earnest after the long Lunar New
Year holidays. [] []
TARGET $90?
Crude imports by China jumped 13.8 percent from the previous
month and reached 4.95 million barrels a day, preliminary data
released by the General Administration of Customs showed.
March's oil import levels were just a touch below December's
record 20.9 million tonnes.
Barclays Capital analysts said oil prices had convincingly
broken out of the $70-$80 a barrel range and could rise towards
$90 as the global economy regained strength.
"The follow-through in the recovery in coming months may
well be one element behind the creation of a base for a further
shift up in prices," Barclays analysts led by Paul Horsnell said
in a report.
"The very limited recent increases in prices seem justified;
indeed, they are perhaps remarkably modest given the pace of
global recovery over the past two quarters in particular."
In a sign of upbeat sentiment over oil prices, open interest
positions were heavier at the NYMEX May $90 call option and the
$80 and $75 put options, according to Reuters data on Friday.
[]
Separately, money managers extended net crude oil long
positions on the New York Mercantile Exchange to a record
186,732 in the week to April 6, up from 169,478 in the previous
week, the Commodity Futures Trading Commission said on Friday.
[]
(Additional reporting by Fayen Wong in Perth; editing by Keiron
Henderson)
