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Chinese crude imports show first annual growth in 7 months

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Hedge funds buying on talk of winter demand in Europe

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Syrian rebels setting up government; oil sector to reopen

By Erwin Seba

HOUSTON, Dec 10 (Reuters) - Oil prices rose on Tuesday

as markets looked to rising demand in China, the world's largest

buyer, and possible tight supply in Europe this coming winter

and away from the overthrow of Syria's president.

Brent crude futures were up 51 cents, or 0.71%, to

$72.64 a barrel at 1043 a.m. CST (1643 GMT). U.S. West Texas

Intermediate was up 59 cents, or 0.86%, at $68.97. Both

benchmarks had risen more than 1% on Monday.

Support came from reports that China will adopt "appropriately

loose" monetary policy in 2025 as Beijing tries to spur economic

growth. This would be the first easing of its stance in 14

years, though details remain thin.

Chinese crude imports also grew annually for the first time in

seven months, jumping in November from the year-earlier period.

The increase, however, "was more a function of stockpiling

than demand improvement," said Tamas Varga of oil broker PVM.

"The economy will only be stimulated by improving consumer

sentiment and spending, by a rise in domestic aggregate demand

echoed in a healthy increase in consumer inflation," he added.

Hedge funds were buying on speculation about winter demand, said

Phil Flynn, senior analyst with Price Futures Group.

"Hedge funds are starting to buy on tightness of supply in

European markets this winter," Flynn said.

In Syria, rebels were working to form a government and restore

order after the ousting of President Bashar al-Assad, with the

country's banks and oil sector set to resume work on Tuesday.

"The tensions in the Middle East seem contained, which led

market participants to price for potentially low risks of a

wider regional spillover leading to significant oil supply

disruption," IG market strategist Yeap Jun Rong said.

While Syria itself is not a major oil producer, it is

strategically located and has had strong ties with Russia and

Iran.

Oil prices could receive a boost if the U.S. Federal Reserve

comes through with an expected quarter-percentage-point cut to

interest rates at the end of its Dec. 17-18 meeting. That could

juice oil demand in the world's biggest economy, though traders

are waiting to see if this week's inflation data derails the

cut.