RPT-PREVIEW-Asia oil traders to party hard after year-long pain

(Repeats from Thursday)

* Cautious optimism to buoy annual trading bash

* Fears industry's comeback may be protracted

* Worries linger over huge distillate surplus, contango

By Jennifer Tan

SINGAPORE, Oct 29 (Reuters) - The annual get-together of Asia's oil traders will probably be a more upbeat affair this time, as oil's climb towards $80 a barrel and a hiring upswing suggest the industry is poised to rebound from a year-long slump.

Gloom shrouded the sector in 2008 as the global credit crisis ushered in the worst financial downturn in decades, bringing a plunge in crude prices from record peaks, shrinking refining margins and dwindling trade volumes.

But tentative optimism has since emerged that the industry could be turning the corner, with oil hitting a fresh 2009 peak last week, following an out-of-season round of job-swapping in Asia's oil and commodities trading circles in summer.

"Oil prices are higher. Demand-wise, it can't get any worse, so there is some optimism going forward, and probably it will be a better atmosphere than last year," said a gas oil trader.

For a graphic of oil's year-on-year performance over the past 12 months, click: here But the industry's comeback could be protracted.

The outlook remains clouded by persistently weak diesel demand, creating a huge surplus in distillates, the bulk of which are stored on ships off Europe and the Mediterranean, as hopes turn towards a harsh winter in the West to help ease the glut.

There are also fears higher oil prices could crimp the budding rebound in the global economy.

China's economy expanded as expected in the third quarter, led by a surge in investment and bank lending, but mixed data from the U.S. indicate a slow, if not patchy, improvement.

The three-day Asia Pacific Petroleum Conference (APPEC) kicks off on Tuesday with a discussion forum and more than two dozen evening bashes at lavish hotels, ranging from the Ritz Carlton to the Four Seasons and the Fullerton.

"I guess all of us will be thinking about the pace of economic recovery, whether there might be a double-dip recession, though most are leaning towards a sluggish jobless recovery," said a distillates trader at a refining firm.

Suggestions of a potential upturn emerged as early as June, as investment banks such as JPMorgan Chase (JPM.N) and Bank of America Merrill Lynch (BAC.N) went on a hiring spree. This triggered a round of job-switching, ending the uncertainties and anxieties that had frozen corporate expansion plans.