* U.S. non-farm payrolls surprisingly weak
* Cold weather in Europe propels Brent above $91
* Several banks boost oil price forecasts through 2011
(Recasts, adding details throughout, changes dateline from
previous LONDON.)
By Joshua Schneyer
NEW YORK, Dec 3 (Reuters) - Oil rose to a new 25-month high
on Friday, gaining for a fourth day, as a weaker U.S. dollar
spurred more commodities investment and a cold spell in Europe
tightened fuel supplies.
U.S. crude futures <CLc1> for January rebounded from an
earlier decline to rise $1.0 to $89.08 a barrel by 1:06 p.m. in
New York, after rising as high as $89.18.
Prices rose as investors largely shrugged off economic data
showing U.S. employment grew less than expected in November and
the jobless rate hit a seven-month high. []
ICE Brent crude futures <LCOc1> traded up $1.12 to $91.80,
after setting a fresh two-year high of $91.85.
"Today's crude prices are up with support from higher
heating oil on the back of cold weather both here in the U.S.
and in Europe and the weakened dollar, which has also
encouraged buying," said Andy Lebow of MF Global in New York.
Unseasonably cold weather in Europe and parts of the United
States have prompted a surge in demand for heating oil and
energy products, with forecasts calling for cold spells to
continue.
The U.S. National Weather Service, in its eight to 14-day
outlook issued on Thursday called for below-normal temperatures
for much of the eastern half of the country, which includes the
world's largest regional market for heating oil. Front-month
NYMEX heating oil <HOc1> rose 1.7 percent.
The U.S. dollar <.DXY> weakened sharply against a basket of
foreign currencies on Friday, shedding 1.2 percent of its
value, as more confidence that Europe can overcome its debt
crisis, and negative U.S. payrolls data, helped the euro gain
on the greenback.
That can help boost demand for oil since it makes the
dollar-priced commodity cheaper for holders of other
currencies.
Non-farm U.S. payrolls rose a less-than-expected 39,000 in
November, the Labor Department said on Friday, and the
unemployment rate was bumped up in November to 9.8 percent.
"That was a very bad number," said Thorbjrn Bak Jensen with
Global Risk Management in Denmark.
Economists had expected payrolls to increase 140,000 last
month and the unemployment rate to be unchanged at 9.6 percent.
Oil traders bid up prices after at least four major banks
boosted their longer-term outlooks for oil prices this week,
with one of the most bullish among them, Goldman Sachs, calling
for U.S. crude futures to rise to $100 a barrel next year, as
global economies rebound faster than previously expected.
Deutsche Bank, JP Morgan and Societe Generale all tweaked
their oil price outlooks to the upside this week.
[]
But some factors still suggest that a correction to the
downside could be forthcoming, including signs that China may
tighten its monetary policy.
Chinese state news agency Xinhua reported on Friday that
top Communist Party leaders have decided China will switch to a
"prudent" monetary policy from a moderately loose stance, a
move that could prompt interest rate increases and lending
controls.
(Additional reporting by Gene Ramos in New York and Ikuko
Kurahone in London; Editing by Marguerita Choy)
