* Saudi says consumers expect oil $70-$90, lifts crude
* China, U.S. manufacturing data helps support oil
* Parcel explodes in Athens, police detonate two more
* Coming up: API oil inventory data on Tues, 4:30 p.m. EDT
(Recasts, updates prices and market activity, changes byline
and dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Nov 1 (Reuters) - Oil prices jumped more than 2
percent on Monday after comments by Saudi Arabia about
consumers tolerating oil prices as high as $90 a barrel and
unease about a bombs found in Greece fueled earlier gains.
Data showing better-than-expected manufacturing growth in
China boosted oil and the dollar's weakness early on Monday
also helped crude push above $83 to a more than two-week peak.
"Consumers are looking for oil prices around $70, but
hopefully less than $90," Saudi Arabia's oil minister Ali
al-Naimi said in comments following a speech in Singapore.
"There's almost an anchor now for the price." []
The comment was interpreted by brokers and analysts as
signaling Saudi Arabia could allow prices to rise as high as
$90, above the $70-$80 range it has recently targeted.
U.S. crude for December delivery <CLc1> rose $2.16 to
$83.59 at 1:49 p.m. EDT (1749 GMT). ICE December Brent crude
<LCOc1> rose $2.06 to $85.21.
"Naimi's comment is probably the most convincing reason,"
Carsten Fritsch, analyst at Commerzbank in Frankfurt, said
about oil's price spike to near $84.
"It gives assurance that the Saudis won't do anything to
prevent a further rise above $80," he added. "At least until
prices exceed $90."
Trading volumes for U.S. crude remained muted ahead of this
week's Federal Reserve meeting expected to result in more
monetary easing by the central bank and to keep pressure on the
dollar.
Ahead of Naimi's comments, there was news that a parcel
exploded in Athens and others were intercepted, following
Friday's incidents where packages containing bombs were
intercepted in Britain and Dubai on Friday. []
"You have the weak dollar and China growth and the Fed, but
there is concern about the cargo bombs. It's got shorts nervous
and there is just the fear of the unknown," said Richard
Ilczyszyn, senior market strategist at Lind-Waldock in
Chicago.
The dollar index seesawed after rebounding, but the
greenback had firmed against the euro and yen after
stronger-than-expected U.S. manufacturing data. []
Oil had earlier received lift from unexpectedly strong
manufacturing data out of China, which also boosted shares in
Europe and Asia. []
The surprisingly strong growth in October was probably too
little, too late to stop the Federal Reserve from more monetary
easing. []
The quicker pace of factory growth was also tempered by a
separate report showing U.S. personal income fell in September
while consumer spending remained tepid.
FED EXPECTATIONS
The Fed is widely expected to announce new bond purchases,
known as quantitative easing, to pump more money into the U.S.
economy, when its two-day meeting ends on Wednesday.
But producers of dollar-denominated oil have voiced
concerns about the battering being given the U.S. dollar.
Since October, U.S. crude prices have been stuck in a
$79-$85 trading range, with prices having been stuck in a wider
range since May, when both the 2010 low of $64.24 and the
year's high of $87.15 were posted.
(Additional reporting by Alex Lawler in London; Editing by
Marguerita Choy)
