UPDATE 1-Oil nears five-month high as commodities rally

                                
 * Oil may catch up with gains in other commods -fund
manager
                                
 * Technicals show oil to top five-month high
[ID:nSGE69D00G]
                                
 * Coming Up: OPEC meeting, U.S. EIA weekly stocks; 1500
GMT
 (Adds OPEC President comments, graphic on oil vs. copper,
gold)
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, Oct 14 (Reuters) - Oil rose for a second day on
Thursday, dragged towards five-month peaks above $84 by a
broad-based rally in commodities fuelled by investors dumping
the dollar in a flight to value-preserving assets.
                                
 U.S. crude for November <CLc1> climbed $1.01 cents to
$84.02 a barrel by 0710 GMT, approaching last week's peak of
$84.43, the highest since May 4, while ICE Brent added 76 cents
to $85.40.
                                
 Improving fundamentals in the oil market, including falling
inventories in the United States, rebounding OECD demand and
soaring imports in China, are prompting traders to jump on the
crude bandwagon, as expectations mount for a fresh dose of
expansionary monetary policy, or quantitative easing, by the
U.S. Federal Reserve.
                                
 "The crude oil market is behind other major commodities,
but it should catch up as risk appetite comes back because of
the potential quantitative easing," said Tetsu Emori, a fund
manager at Tokyo-based Astmax Co Ltd, adding that prices could
reach $100 by the second half of 2011.
                                
 For a graphic of oil's performance vs. gold and copper:
http://graphics.thomsonreuters.com/AS/0810/ABE_20101410150319.jp
 g    The Organization of the Petroleum Exporting Countries
(OPEC), which meets in Vienna on Thursday, is not planning to
increase output to maintain prices within its preferred range
of $70-$80 a barrel. [ID:nLDE69C1K2]
                                
 Instead, it is expected to leave production targets
unchanged and call for greater compliance with December 2008
output cuts.
                                
 OPEC President Wilson Pastor on Thursday reiterated there
was consensus among member countries to keep output unchanged,
adding prices of between $75-$85 were not a threat to the world
economy.
                                
 But some OPEC members are eyeing prices higher than the
preferred range voiced by Saudi Arabian oil minister Ali
al-Naimi and other OPEC officials.
                                
 "We are looking to have next year an increase to between
$90 and $100 a barrel...to have a comfortable economy,"
Venezuelan Energy and Mines Minister Rafael Ramirez told
reporters in Vienna on Wednesday. [ID:nLDE69C1N2]
                                
 STRONGER FUNDAMENTALS
                                
 U.S. crude inventories fell unexpectedly last week, partly
because of the closure of the Houston Ship Channel, shedding 4
million barrels compared to an expected increase of 1.1
million, the American Petroleum Institute (API) said on
Wednesday.
                                
 Gasoline and distillate stocks, including heating oil and
diesel, also fell by 1.9 million barrels and 254,000 barrels,
respectively, versus forecasts from a Reuters survey for drops
of 1 million and 1.1 million barrels. [ID:nN13265398]
                                
 Government statistics on U.S. stocks and demand from the
Energy Information Administration follow on Thursday at 1500
GMT.
                                
 Global oil demand growth is expected to accelerate for the
rest of this year, but is revised lower for 2011 and could slow
if the world economy disappoints, the International Energy
Agency (IEA) said on Wednesday. [ID:nLDE69C0NE]
                                
 The U.S. Energy Information Administration on Wednesday cut
its 2011 oil demand growth forecast slightly, but also raised
its 2010 forecast. [ID:nWALDLE6OM]
                                
 China imported a record amount of crude oil in September, a
third more than a year earlier, sparking talk it is building
stocks. [ID:nTOE64607F]
                                
 In other markets, the dollar fell to its lowest in nine
months against a basket of currencies <=USD> <.DXY> on
Thursday, giving up more than 0.8 percent on the day, making
oil imports cheaper for emerging economies, while the euro rose
to an eight-month high. [ID:nTKW007142]
                                
 The greenback had slipped against most currencies on
Wednesday after Federal Reserve meeting minutes released a day
earlier reinforced expectations of more monetary easing in the
United States. [ID:nN13104864]
                                
 "Currently, for investors the conditions are one of the
best for the past five years," Emori said. "It's a very
positive factor because governments have to sustain the economy
and employment."
                                
 World stocks jumped to a six-month high on Wednesday and
gold jumped to a new record on Thursday, while copper hit a
fresh 27-month high. [MKTS/GLOB]
                                
 French workers battling pension reform halted supplies from
most of the country's oil refineries on Wednesday and also
blocked some fuel depots as the risk grew of shortages at
petrol pumps. [ID:nLDE69C09R]
 (Editing by Clarence Fernandez)