CORRECTED-UPDATE 9-Oil hits 10-week high; China and U.S. data strong
(Corrects price rise of RBOB gasoline contract in paragraph 5)
* No need to adjust OPEC production - Saudi minister
* Brent prices jump, volume spikes before 12:00 p.m. EST
* China manufacturing PMI at 18-month high
* U.S. manufacturing expanded at fastest pace in 2-1/2 years
* Hedge funds raise bets on Brent
NEW YORK, Dec 2 (Reuters) - Brent crude jumped on Monday and hit its highest price since September, boosted early by strong manufacturing data from China and the United States, then rising further on reports that several Russian cargo cancellations had tightened supply.
Volume surged and Brent extended its gains by nearly $1 just before noon EST (1700 GMT), as Russian oil companies Lukoil and Rosneft canceled loadings of two Urals cargoes on Dec 13-14 and 14-15 from the Baltic ports of Primorsk and Ust-Luga, traders said.
Brent crude for January rose $1.76 to settle at $111.45 a barrel, after hitting a session high of $112.34. U.S. crude rose $1.10 to settle at $93.82 a barrel.
The spread between the two contracts finished at $17.63, after swinging over $2 between $16.22 and $18.44 during the session.
The February Brent contract also surged more than $2 a barrel at one point, and finished up $1.81 at $111.14 a barrel. Refined products gained as well, with RBOB gasoline futures finishing up by 1.56 cents, or 0.6 percent, to $2.6784 a gallon.
"Whenever you get this turmoil on the Brent side, people look over to the U.S. Our products look a lot cheaper," said Phil Flynn, an energy analyst at the Price Futures Group in Chicago, Illinois.
"The U.S. has almost become the swing producer when it comes to product."
Crude rose early after data showed the U.S. manufacturing sector expanded last month at its fastest pace in 2-1/2 years, outstripping forecasts, and the employment picture also improved.
In China, the official Purchasing Managers' Index showed manufacturing growth at an 18-month high in November due to robust domestic and foreign demand.
A similar indicator for Britain and Germany also showed a pick-up in manufacturing activity.
OPEC PRODUCTION LIKELY STEADY
The Saudi oil minister indicated there was no need for the Organization of the Petroleum Exporting Countries (OPEC) to adjust supply as he arrived in Vienna for the producer group's meeting on Wednesday.
Faced with fast-rising supplies from the United States, the group might cut supply to prop up oil prices, if not for several cartel members pumping well below par because of civil strife or sanctions.
Iran, Libya, Nigeria and Iraq of the 12-member group account for almost 3 million barrels per day of supply outage on the 90 million bpd world market.
HEDGE FUNDS BULLISH ON BRENT
Hedge funds and other large speculators raised their bets on higher Brent crude prices for the second straight week in the seven days to Nov. 26, exchange data showed on Monday, providing another indication money manager sentiment towards the market may have turned.
The speculator group raised its net long futures and options positions by 22,380 contracts to 129,761, figures from the IntercontinentalExchange showed, taking the increase to more than 45 percent since hitting a year low on Nov. 12.
In the same week, oil speculators cut their long positions on WTI. Oil speculators cut their net long position in U.S. West Texas Intermediate crude (WTI) by 5,489 contracts to 285,076 in the week ending Nov. 26, data from the Commodity Futures Trading Commission showed.
The CFTC said its data this week did not include trader positions in the NYMEX financial crude oil futures contract, which are normally included in the aggregate calculations. It did not give a reason for the omission. (Additional reporting by Jeanine Prezioso, Christopher Johnson and Jacob Gronholt-Pedersen; editing by Keiron Henderson, Anthony Barker, David Gregorio and Bob Burgdorfer)
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