UPDATE 8-Oil up at 27-month peak on economic data, cold

                                
 * Upbeat economic data pushes oil to 27-month peak
                                
 * Colder extended forecasts lift heating fuel futures
                                
 * Coming up: API weekly oil data at 4:30 p.m. EST Tuesday
 (Recasts; updates with settlement prices and additional detail
throughout)
                                
 By Robert Gibbons
                                
 NEW YORK, Jan 3 (Reuters) - Oil prices rose to a 27-month
peak on Monday as upbeat European and U.S. manufacturing data
and forecasts for cold weather reinforced optimism about
economic and energy demand growth.
                                
 Manufacturing in the United States and Europe accelerated
in December and growth in China and India slowed to a more
sustainable level, helping to fuel a move by investors into
riskier assets. [ID:nLDE702187]
                                
 U.S. crude oil for February delivery <CLc1> rose 17 cents
to settle at $91.55 a barrel, its highest settlement since
early October 2008, after earlier rising as high as $92.58.
                                
 Crude oil prices pulled back late in the open outcry
session after the U.S. Interior Department said it will allow
13 companies to resume deepwater drilling in the Gulf of Mexico
without an additional environmental review. [ID:nWNA8140]
                                
 In London, ICE Brent crude for February <LCOc1> rose 9
cents to settle at $94.84 a barrel, also the highest close
since October 2008.
                                
 Strong U.S. heating oil <HOc1> and ICE gas oil futures
helped spark the oil futures complex strength, boosted by
expectations more freezing weather is on tap for later in
January.
                                
 U.S. crude oil futures were building on their end-of-year
rally that left prices up 15 percent for 2010.
                                
 Total U.S. crude futures trading volume, thinned by the
holiday season, was above 396,000 lots with 1-1/2 hours left in
post-settlement trading. The 30-day average was 543,282.
                                
 "Heating oil strength is on the colder forecasts further
out, and on top of that crude is being supported by the strong
manufacturing data," said Phil Flynn, analyst at PFGBest
Research in Chicago.
                                
 Total U.S. heating demand this week was expected to be only
0.5 percent above normal, the U.S. National Weather Service
said, and heating oil demand 4.3 percent below normal.
[ID:nLDE70209A]
                                
 But looking further out, the NWS' six- to 10-day and eight-
to 14-day outlook issued Sunday called for below-normal or
much-below-normal readings for the entire nation.
                                
 Temperatures in northern Europe also were forecast to be
near to below normal in the six- to 10-day outlooks, according
to private forecaster DTN Meteorlogix. [ID:nDTN922]
                                
 GROWTH OPTIMISM SUPPORTS PRICES
                                
 The fresh batch of encouraging economic data helped lift
U.S. equities, pushing all three major indexes up more than 1
percent to start the new year. [.N]
                                
 U.S. manufacturing grew for a 17th straight month in
December. The Institute for Supply Management report showed new
orders rose, but factory sector employment slipped to a
nine-month low. [ID:nN03175600] [ID:nEAP101300]
                                
 U.S. construction spending rose in November to touch its
highest level in five months. [ID:nN31145976]
                                
 Prior to the U.S. reports, investors received news that the
official Chinese purchasing managers' index edged down in
December, easing concerns about more efforts by China's
government to cool off its economy. [ID:nTOE6BU02S]
                                
 The Markit Eurozone PMI, which records manufacturing
activity across the major euro-area economies, rose in December
from November to near April's 46-month high. [ID:nLDE702187]
[ID:nSGE70204P]
                                
 While oil prices are pushing toward $100 a barrel three
years after crude first broke triple digits, analysts say spare
production and refining capacity should prevent a repeat of the
2008 run up to $147 a barrel. [ID:N03185284]
                                
 Analysts believe that OPEC members, especially Saudi
Arabia, would likely step in and add production to ensure the
economic recovery is not derailed.
                                
 (Factbox on key differences between 2008 and 2011 for oil
markets: [ID:nN03176391])
                                
 CONTANGO
                                
 U.S. crude futures remain in a stubborn contango, whereby
prompt oil is cheaper than barrels for later delivery, a market
condition that encourages storage. The spread between
front-month February and March crude futures <CL-1=R> had the
premium for March crude as high as $1 intraday on Monday.
                                
 Some brokers thought positions being rolled into the March
contract may have helped curb the gains of front-month
futures.
 (Additional reporting by Eileen Moustakis and Gene Ramos in
New York, Barbara Lewis in London and Jennifer Tan in
Singapore; editing by Jim Marshall)