* China manufacturing sector picks up for first time in 13
* Tension in Israel, Syria and Egypt offer more support
* U.S. fiscal deficit remains single biggest worry
* Coming up: Euro zone manufacturing PMI; 0858 GMT
By Ramya Venugopal
SINGAPORE, Dec 3 Brent crude rose toward $112
per barrel on Monday on signs economic growth was reviving in
China, the world's second-biggest oil consumer, and supply
concerns triggered by tensions in the Middle East.
Activity in China's manufacturing sector quickened for the
first time in 13 months in November, a survey of private factory
managers found, adding to evidence of a pickup after seven
quarters of slowing growth.
China's data "has been broadly supportive of risk markets
and entirely consistent with recent numbers suggesting overall
improvement in growth," said Ric Spooner, chief market analyst,
CMC Markets in Sydney.
"The market will continue to build a significant risk
premium on the probability of disruptions to oil supplies from
the Middle East," he added.
Front month Brent futures were trading 34 cents up
at 111.57 per barrel at 0309 GMT, after rising 2.3 percent in
November. It rose to a high of $111.70 per barrel immediately
after the China data release.
U.S. crude added 20 cents to $89.11 per barrel. The
contract has broken through a key resistance at $88.75 and could
rise to $89.80, according to Wang Tao, Reuters market analyst
for commodities and energy technicals.
The HSBC Purchasing Managers Survey (PMI) which focuses on
private export-oriented manufacturers, rose to 50.5 in November,
inching above the 50-mark that separates growth from contraction
for the first time in 13 months.
The findings were in line with a preliminary survey released
last month and a similar survey by the National Bureau of
Statistics. The official PMI rose to a seven-month high of 50.6
for November, from 50.2 in October.
Investors will now be awaiting China's industrial output and
trade data later this month for further confirmation of revival
in the world's biggest energy consumer.
Also offering support to the oil markets are tensions in the
Middle East, such as hostilities between Israel and Palestine,
fresh political unrest in Egypt and the conflict in Syria.
Stung by the U.N. General Assembly's upgrading of the
Palestinians' status from "observer entity" to "non-member
state", Israel said on Friday it would build 3,000 more settler
homes in the West Bank and East Jerusalem, areas Palestinians
want for a future state, along with Gaza.
Egypt's President Mohamed Mursi called a Dec. 15 referendum
on a new constitution, hoping to end protests over a decree
expanding his powers, which plunged the country into its worst
crisis since he came to power.
Syrian forces pounded rebel-held suburbs around Damascus
with fighter jets and rockets on Sunday, opposition activists
said, killing and wounding dozens in an offensive to push rebels
away from the airport and stop them closing in on the capital.
Adding to jitters, the U.S. Senate approved on Friday
expanded sanctions on global trade with Iran's energy and
shipping sectors, its latest effort to ratchet up economic
pressure on Tehran over its disputed nuclear program.
US FISCAL WORRIES
But worries about United States' fiscal deficit and
negotiations on the upcoming fiscal cliff, a $600 billion
package of tax hikes and spending cuts which may plunge the
world's biggest economy into deep recession, kept oil price
gains in check.
"The U.S. fiscal cliff remains the single key factor
influencing demand outlook" and markets are veering around to
the view that U.S. economic growth will be slower, said Spooner.
The package takes effect at the end of the year and
President Barack Obama's administration and congressional
leaders are trying to work toward a deficit reduction in the
next session of Congress that begins in January.
(Editing by Himani Sarkar)