Oil rises over $95 on weak dollar

NEW YORK (Reuters) - Oil rose 1.8 percent to above $95 a barrel on Friday as the dollar slipped and cold weather headed toward the giant U.S. Northeast heating oil market.

Short covering ahead of the expiration of December U.S. crude futures also helped push prices higher, with oil settling up $1.67 at $95.10 a barrel. London Brent crude for January rose $1.39 to $91.62 a barrel.

Oil has slipped from an all-time high of $98.62 a barrel struck last week on the back of winter supply concerns, the falling dollar and rising speculator investment.

"All the issues that got there are still there," said Tom Bentz of BNP Paribas Commodity Futures Inc.

The dollar broadly fell on reports showing the biggest drop in U.S. industrial production since January and poor foreign investment in U.S. assets in September.

Prices fell on Thursday after U.S. government data showed a surprise 2.8 million build in crude inventories last week, easing supply concerns in the world's top consumer.

Demand for heating oil in the U.S. Northeast is expected to rise as temperatures fall below normal, forecaster Meteorlogix said.

Despite concerns from consumer nations hit with rising oil costs, producer group OPEC will not discuss output levels at a summit meeting this weekend.

Officials said it will be on the agenda at the cartel's next meeting on December 5 in Abu Dhabi. Iran's oil minister said it was too early to say what action OPEC might take then.

Concerns that high prices and economic problems in the United States might hit consumption growth have pressured oil prices, as the U.S. data showed a 0.7 percent dip in demand over the past four weeks, compared with a year ago.

OPEC also lowered its world oil demand growth forecast for the fourth quarter, partly due to the U.S economic problems and just days after the International Energy Agency slashed its own demand outlook.

"There are some concerns on the strength of oil demand growth going forward in this price environment," said Mike Wittner, global head of oil research at Societe Generale.

"But for the time being, those concerns are being offset by the fact that it's mid-November and we haven't started the winter yet."

(Reporting by Matthew Robinson in New York, Randy Fabi in London and Felicia Loo in Singapore; Editing by Christian Wiessner)