* Dollar strength holds oil from bigger gains
* Heating oil, gasoline futures also higher
* Analysts raise price estimates in Reuters poll []
(Updates prices, adds oil price poll)
By Dmitry Zhdannikov
LONDON, Dec 20 (Reuters) - Oil prices rose on Monday as
forecasts for continued freezing temperatures in Europe and the
U.S. Northeast this week looked set to boost heating fuel
demand.
U.S. crude for January delivery <CLc1> climbed 48 cents to
$88.50 a barrel by 1156 GMT, adding to gains from the previous
session. The January contract expires at the end of trading on
Monday. ICE Brent for February <LCOc1> rose 35 cents to $92.02.
"Weather is cold in the Atlantic Basin and particularily in
Europe. However pricing snowmaggedon episodes for oil demand is
always a bit tricky as it also translates into lower demand for
traveling fuels -- jet, diesel, gasoline," said Olivier Jakob
from Petromatrix.
The U.S. Northeast, the world's top heating oil market, was
expected to be colder than usual from Dec. 24 to 28, according
to weather data released on Friday. []
In Europe, Arctic conditions were expected to continue in
the north this week, potentially prolonging travelling
disruptions during one of the busiest times of the year.
[]
Gas demand across Britain was expected to hit a record on
Monday, causing National Grid to issue its first gas balancing
alert this winter []
U.S. heating oil demand is forecast at 4.6 percent above
normal for the week ending Dec. 25. It was 19.6 percent above
normal last week, said the National Weather
Service.[].
"Expectations of strong holiday driving demand and colder
weather predictions lifted gasoline futures, which also buoyed
the crude market," said ANZ Commodity Research in its daily
market report.
U.S. gasoline future were up one percent <RBc1>
PRICE POLL
Oil prices found support from positive U.S. economic data
and a monthly Reuters oil price poll showed a jump in estimates
for 2011, when analysts expect oil to average $86, almost $3 up
from last month's poll. []
"We anticipate that oil prices will remain robust in 2011 as
demand from thirsty developing nations continues and inventories
are tapped," said Lloyds Bank Corporate Markets' senior oil
analyst Simon Cooke-Yarborough.
However, relative dollar strength due to new tensions on the
Korean Peninsula and worries over eurozone debt capped gains.
"The global risks for the holidays are not small. The
Koreans keep on provoking each other, there is still a risk of
further tightening measures from China and Europe remains full
of surprise with its peripheries and their bond yields," said
Jakob.
South Korea launched live firing drills from a disputed
island on Monday, despite threats of war from Pyongyang after an
emergency U.N. Security Council meeting failed to agree on how
to defuse the crisis. [].
The euro hit a two-week low as concerns over the euro zone
debt crisis persisted following last week's Irish rating
downgrade. []
(Reporting by Dmitry Zhdannikov)
