RPT-UPDATE 7-Oil leaps above $86 on positive US, China data

                                
 * China manufacturing PMI rises to seven-month high
                                
 * U.S. private sector job creation jumps in November
                                
 * EIA says U.S. crude inventories unexpectedly rise
                                
 * Coming up: U.S. jobless claims data, Thursday
                                
 (Recasts, updates market activity and prices, new byline
and changes dateline, previously LONDON)
                                
 By Gene Ramos
                                
 NEW YORK, Dec 1 (Reuters) - Oil prices shot up to a
two-week high above $86 a barrel on Wednesday as positive data
from the United States and China, the world's top two oil
consumers, lifted investor confidence about economic recovery.
                                
 Jobs in the U.S. private sector rose by the biggest margin
in three years [ID:nN01127417] and manufacturing posted its
16th consecutive month of expansion, though the pace tapered
off slightly in November. [ID:nN01190020]
                                
 In China, the official purchasing managers' index (PMI), a
gauge of factory activity, climbed to a seven-month high in
November. [ID:NTOE6B004C]
                                
 The upbeat economic data countered, for the moment,
concerns about Europe's sovereign debt problems and a U.S.
government report showing a surprise increase in domestic crude
inventories last week.
                                
 The day's rally was led by U.S. gasoline futures, which
surged nearly 5 percent, on reports of tight supplies in the
U.S. East Coast and a snag at the 300,000 barrels-per-day
refinery of Irving Oil Ltd in Saint John, New Brunswick, which
delivers gasoline to the New York Harbor. [ID:nN01145565]
                                
 U.S. crude for January delivery <CLc1> gained $2.21, or 2.6
percent, to $86.32 a barrel by 12:35 p.m. EDT (1735 GMT) having
surged to $86.47 earlier, the highest since Nov. 12. It
rebounded from a 2 percent slide on Tuesday.
                                
 ICE Brent crude <LCOc1> rose $2.35, or 2.7 percent, to
$88.27.
                                
 "From the depths of despair yesterday that resulted in a
sell-off, there is a rash of positive economic data everywhere
you look today, and that pulled prices up," said Phil Flynn, an
analyst at PFGBest Research in Chicago.
                                
 U.S. crude oil inventories rose 1.1 million barrels last
week, the U.S. Energy Information Administration said, against
the forecast for a 900,000 drawdown in a Reuters poll. [EIA/S]
                                
 Crude initially rose earlier, guided by data released on
Tuesday by the industry group American Petroleum Institute
which showed crude stockpiles fell 1.1 million barrels last
week. [API/S]
                                
 Oil also gained as the U.S. dollar weakened against a
basket of currencies [.DXY]. Oil and dollar-denominated
commodities often move inversely to the dollar.
                                
 The euro surged against the U.S. dollar after a U.S.
official said the United States would be ready to support the
extension of the European Financial Stability Facility via an
extra commitment of money from the International Monetary Fund.
[USD/] For details, see [ID:nBRU011183]
 (Additional reporting by Robert Gibbons in New York; By Alex
Lawler in London; Alejandro Barbajosa in Singapore; editing by
Sofina Mirza-Reid)