UPDATE 6-Oil higher as growth hopes offset euro woes
* U.S. economic indicators bolster optimism, oil
* Ireland downgrade lifts dollar, limits crude rise
* Coming up: January U.S. crude contract expires Monday (Recasts, updates with settlement prices, market activity)
By Robert Gibbons
NEW YORK, Dec 17 (Reuters) - Oil prices rose on Friday in seesaw trading and posted a weekly gain as supportive U.S. economic data and gasoline futures combined to offset the dollar's strength amid renewed concerns about euro zone debt problems.
Optimism that the U.S. economy is gathering steam was bolstered by news that the Conference Board's measure of leading economic indicators rose 1.1 percent in November, the biggest rise since March and the fifth straight monthly gain.
In a separate report, the Economic Cycle Research Institute said its gauge of future growth rose to its highest level since May. [ID:nN17106564]
Refinery snags and expectations for holiday driving demand boosted U.S. gasoline futures RBc1, supporting crude futures even as heating oil futures HOc1 ended the day slightly lower. Heating oil still managed a gain for the week.
U.S. crude for January delivery CLc1 rose 32 cents to settle at $88.02 a barrel, bouncing off an $87.01 low but stalling when it reached an intraday peak of $88.52.
For the week, crude gained 23 cents, or 0.26 percent, ahead of the January contract's expiration on Monday and after posting a 1.57 percent loss the previous week.
Prices reached a 26-month high of $90.76 on Dec. 7.
"After the market's rally above $90 it's trying to consolidate below, waiting for a cue as to whether we're going to see a year-end sell-off or whether more economic optimism is going to push crude higher," said Gene McGillian, analyst, Tradition Energy in Stamford, Connecticut.
Money managers increased their net long crude oil futures positions to a record high in the week to Tuesday, according to a weekly report from the Commodity Futures Trading Commision released late on Friday.
But technicals indicated crude could be set to slip to $85.41 over the next week, based on its wave pattern and a Fibonacci retracement analysis. [ID:nL3E6NH00C]
Graph of four-week technical outlook on oil:
Reuters Insider on commodities investment:
ICE Brent crude for February LCOc1, in front-month position after January contract's expiration on Thursday, rose 7 cents to settle at $91.67 a barrel, also in choppy trading.
February Brent crude's premium over U.S. February crude was at $3.07, down from Thursday's $3.58 premium comparing January contracts which was a seven-month high for the spread.
Oil managed to shrug off weakness in the euro which fell to a two-week low against the dollar, declining for a second straight week after a multi-notch downgrade of Ireland's credit rating. Ratings agency Moody's also put Ireland on a negative outlook, warning that further downgrades could follow.
A stronger dollar typically pressures dollar-denominated oil prices as it raises the value of dollars paid to producers and raises oil prices in markets using other currencies.
While concerns about Europe's debt crisis swirled, fears were tempered by news that German business sentiment rose to its strongest level since 1991. [ID:nLDE6BG0KP]
REFINED PRODUCTS STRENGTH
Sunoco Inc's SUN.N unit upset at its Marcus Hook, Pennsylvania, refinery [ID:nWNAB9708] added lift to gasoline futures already supported by last week's Hovensa LCC's shut gasoline unit at its St. Croix refinery. [ID:nN09250812]
The U.S. Northeast -- the nation's major heating oil consuming region -- will turn colder than previously forecast late next week and into the last week of December, according to weather data from Point Carbon, a Thomson Reuters company that does natural gas and power analysis. [ID:nN1790640]
The U.S. January heating oil crack spread, the profit margin for processing crude into fuel, slipped to $15.88 a barrel on Friday, But it ended at $16.30 on Thursday, the highest since ending at $21.54 on Feb. 12, 2009.
Below normal temperatures are forecast to continue in northern Europe, where ICE gas oil cracks traded above $12 a barrel intraday on Friday. [ID:nDTN110] [ID:nLDE6BG1UV] (Additional reporting by Gene Ramos in New York, Una Galani in London and Randy Fabi in Singapore; editing by Jim Marshall)
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