* Equities rise, dollar slips after Dubai worries wane
* Chinese business surveys at peaks, signals rosy outlook
* U.S. fuel data expected to show steady crude stocks
(Updates prices)
By Edward McAllister
NEW YORK, Dec 1 (Reuters) - Oil climbed more than $1 to
above $78 a barrel on Tuesday, lifted by solid manufacturing
data from China and a weaker dollar.
U.S. crude for January delivery rose $1.25 to $78.53 a
barrel by 11:33 EST (1633 GMT). Brent crude added $1.03 to
$79.50.
Business surveys in China on Tuesday showed that the
world's second-largest energy consumer has largely recovered
from the global economic downturn, laying the foundations for
solid expansion in 2010.
"Crude and product futures rose for a second day after a
report showed that manufacturing activity in China advanced at
the fastest pace in five years in November," Addison Armstrong,
analyst at Tradition Energy in Stamford, Connecticut, said in a
research note.
Investors have looked to wider macro economic data in
recent months for signs of economic recovery and a potential
rebound in energy demand.
U.S. stocks rose on Tuesday, buoyed by hopes of economic
recovery. Data showed pending sales of previously owned U.S.
homes rose more than expected to their highest level in 3-1/2
years in October.
A weaker dollar also provided support on Tuesday as waning
worries about Dubai's debt helped dim the greenback's safe
haven appeal. A weaker dollar makes dollar-denominated
commodities like crude cheaper for holders of other currencies
and tends to support prices.
The catalyst for the easing concern about Dubai's debt was
an announcement on Monday from Dubai World, center of the debt
storm, that its planned restructuring of some units involved
$26 billion in debt.
"It looks like sentiment, primarily relief from Dubai,
because overall supply and demand has not changed," said Joseph
Arsenio, Managing Director at Arsenio Capital Management in
Larkspur, California, on crude's rise.
The American Petroleum Institute's weekly U.S. crude
inventory report will be released later on Tuesday. Crude
stockpiles were unchanged this week, according to a preliminary
Reuters poll.
Oil has rallied from below $33 last December but has held
in a narrow band of $70 to $82 over the past two months. Some
analysts see little chance that would push prices above the
range given ample supplies and little sign of strengthening
demand.
"We see little impetus for a break to the upside, even if
economic indicators surprise to the upside this week," Credit
Suisse analysts said in a research note.
"The inventory overhang in the diesel and heating oil
markets should prevent prices from breaking higher for the time
being."
(Additional reporting by Robert Gibbons and Gene Ramos in New
York, Alex Lawler in London and Fayen Wong in Perth; editing by
Jim Marshall)
((Edward.mcallister@thomsonreuters.com; +1 646 223 6221;
Reuters Messaging:edward.mcallister.reuters.com@reuters.net))
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