UPDATE 3-Oil higher after OPEC output rollover; eyes on China

                                
 * OPEC keeps output targets, wants prices at $70 to $80/bbl
                                
 * Eyes on China monetary policy with rate rise expected
                                
 * Coming Up: ECB President Trichet speech; 1830 GMT
 
 (Updates detail, comment, prices)
                                
 By Christopher Johnson
                                
 LONDON, Dec 13 (Reuters) - Oil rose on Monday after OPEC
agreed to keep output targets unchanged despite a surge in
heating fuel demand in the northern winter.
                                
 The Organization of the Petroleum Exporting Countries
decided on Saturday, as expected, to maintain its production
policy and leading member Saudi Arabia said it still favoured
oil prices between $70 and $80 per barrel. [ID:nLDE6BC0KT]
                                
 Oil has surged to above $90 this month as sub-zero
temperatures have swept across Europe, the United States and
parts of east Asia.
                                
 Europe is expected to have colder than normal temperatures
with energy demand above normal, according to DTN Meteorlogix,
and a storm has dumped large amounts of snow in the U.S.
Midwest. [ID:nN12122011] [ID:nDTN295]
                                
 U.S. crude for January <CLc1> rose 94 cents to $88.73 a
barrel by 1039 GMT. ICE Brent <LCOc1> jumped $1.21 to a high of
$91.69.
                                
 "What's happening right now is, I think, support from very
cold weather and increasing demand, mainly from Europe," said
Christophe Barret, global oil analyst for French bank Credit
Agricole. "Europe will remain very cold."
                                
 Bullish sentiment was underlined by oil price hawk
Venezuela, which called at the OPEC meeting for $100 oil and
said OPEC should not lift output again through the end of 2011.
                                
 Expectations of higher oil prices have drawn investors into
U.S. crude oil futures, also known as West Texas Intermediate or
WTI, data from the Commodity Futures Trading Commission shows.
                                
 Speculators raised their net long positions in U.S. crude
futures to a record high in the seven days to Dec. 7, the day
prices hit $90 a barrel for the first time in over two years.
                                
 
                                
 STRONG FUNDAMENTALS
                                
 "Net speculative length in WTI is more than three times
higher than a year ago and close to four times higher than at
the end of 2007 when oil prices were at the same levels as
today," said Olivier Jakob, analyst at consultants Petromatrix.
                                
 Several reports, including one from the International Energy
Agency raising its 2011 oil demand growth forecast, have
indicated that fundamentals are strong, with oil stocks
beginning to fall from historically high levels. [ID:nLDE6B90JO]
                                
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 For oil price forecasts, click: http://r.reuters.com/juq29q
                                
 For oil in different currencies: http://r.reuters.com/kuq29q
                                
 For OECD days forward cover: http://r.reuters.com/muq29q
                                
 For global oil supply/demand forecasts:
                                
 http://r.reuters.com/het29q
                                
 For OPEC news and analysis, click: [O-OPEC] 
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 But markets are worried that much of the strength in
commodities stems from China, where monetary policy has
encouraged high levels of consumption, leading to inflation.
                                
 Chinese authorities have begun to tighten money supply and
many analysts think that Beijing may soon raise interest rates.
                                
 Traders are watching closely for any policy moves that would
dampen demand in the world's number one energy consumer.
                                
 "In view of the high Chinese inflation numbers, which we
suspect are even higher than the official data suggests, we
believe a rate rise will come through sooner rather than later,
and that this will ultimately trigger a correction in a number
of already overheated commodity markets," said Edward Meir,
senior commodity correspondent at brokers MF Global.
                                
 China's headline inflation rose to a 28-month high of 5.1
percent in the year to November, from 4.4 percent in October,
the National Bureau of Statistics (NBS) said on Saturday.
[ID:nBJL002113]
                                
 But China's monetary policy tightening should be gradual
because consumer inflation is unlikely to exceed 5 percent in
2011, an academic adviser to the central bank said in remarks
published on Monday.[ID:nTOE6BC00B]
                                
 China's implied oil demand in November rose 13.7 percent
from a year earlier to a record of nearly 9.3 million barrels
per day, Reuters calculations based on preliminary official data
showed on Monday. [ID:nBJI002487]
 (Additional reporting by Una Galani in London and Rebekah
Kebede in Perth; editing by Anthony Barker)