* Views mixed about effect of China tightening
* Oil prices stay within $1 of eight-week highs
* Coming up: IEA monthly report at 0900 GMT
By Alejandro Barbajosa
SINGAPORE, March 12 (Reuters) - Oil was steady above $82 on
Friday, poised for a second consecutive weekly increase, on
views that energy demand will continue to grow despite any
efforts by China to tighten monetary policy further on rising
inflation.
Chinese crude imports soared to their second-highest daily
average on record in February, customs data showed on
Wednesday, a day before the government said consumer inflation
soared to a 16-month high.
"By tightening they are lowering the probability that the
economy overheats, and that gives you a more stable outlook for
energy demand over coming years," said Ben Westmore, a
commodities analyst at the National Australia Bank.
The front-month U.S. crude contract rose 8 cents to $82.19
a barrel at 0302 GMT. It hit $83.03 a barrel on Wednesday, the
highest level since Jan. 11, when prices touched a 15-month
peak of $83.95.
London ICE Brent for April <LCOc1> gained 8 cents to
$80.36.
China will find it difficult to strike the right balance
between cooling lending while sustaining growth in the world's
third-largest economy, a senior central bank official said in
remarks published on Friday. []
The People's Bank of China has increased required reserves
twice this year, and economists suspect a third rise is
imminent. []
"We don't see the tightening as a big threat to economic
activity in China," Westmore said.
"They are trying to put the economy on a more sustainable
growth path. Authorities are confident enough about the
stability of demand that they feel they can tighten."
OPEC TO KEEP CURBS
The Organization of the Petroleum Exporting Countries
(OPEC), which pumps at least one in every three barrels of oil,
meets in Vienna on March 17 to discuss production policy.
Officials have said they do not expect a change in targets
while prices are within their desired range. []
"To a large extent, all OPEC ministers need to do at this
juncture is maintain the current policy stance, and to float
along with the positive and improving data flow," Barclays
Capital analysts headed by Paul Horsnell said in a weekly
report.
OPEC has restricted output since the onset of the financial
crisis in a bid to support prices. But the group's compliance
with its officially targeted cut of 4.2 million barrels per day
(bpd) has slipped to just 53 percent as prices have risen.
The dollar <.DXY> was slightly softer against a basket of
currencies on Friday, after mixed data on U.S. trade and
jobless claims signalled that the economy was improving at a
slow pace, frustrating attempts by President Barack Obama to
lift employment.
But the dollar is still up almost 8 percent since the end
of November. A stronger U.S. currency boosts the purchasing
power of oil exporters, including OPEC members. A weaker dollar
usually supports oil prices as it makes dollar-denominated
commodities less expensive for holders of other currencies.
[]
The U.S. trade deficit narrowed unexpectedly in January as
oil imports fell to their lowest since February 1999, a
government report showed on Thursday. U.S. exports fell, but
not as much as the oil-led drop in imports. []
(Editing by Ramthan Hussain)
