NYMEX-Crude rises above $86, US fiscal risks to clip gains

SINGAPORE, Dec 14 (Reuters) - U.S. crude futures edged higher on Friday after losing nearly a dollar in the previous session although the absence of a deal among U.S. lawmakers to avert a fiscal crisis looks set to cap gains.

The focus in Asia will be on a preliminary reading of China's manufacturing sector, which could support oil prices if it shows that the country's factory activity continues to bounce back after a seven-quarter economic slowdown.

FUNDAMENTALS

* U.S. crude for January delivery rose 30 cents to $86.19 a barrel by 0044 GMT. West Texas Intermediate is up a modest 0.3 percent for the week so far, its fifth weekly gain in six.

* With an end-of-year deadline looming, U.S. President Barack Obama and House of Representatives Speaker John Boehner talked at the White House as frustration mounted over the recent lack of progress in negotiations to avert the "fiscal cliff" of steep tax increases and spending cuts.

* A state think tank has forecast China's GDP growth next year at around 8 percent and projects the consumer price index to rise around 3 percent, the official China Securities Journal reported.

* OPEC is relaxed about the prospect of rising inventories in the first half of next year, the group's secretary general said, so long as oil prices avoid extreme moves from their current acceptable level.

* The number of Americans filing new claims for jobless benefits fell sharply last week to a near four-year low and retail sales rebounded in November, hopeful signs for the struggling U.S. economic recovery.

* Iran said progress was made in Thursday's talks in Tehran with senior U.N. nuclear inspectors but gave no details other than they would meet again in mid-January.

MARKETS NEWS

* The dollar was steady against a basket of major currencies as the euro's rally ran out of steam, while the yen stayed weak on expectations the Bank of Japan would print more money next week to stimulate the world's third biggest economy.

* Asian shares snapped a week-long winning streak on Friday, tracking global equities lower, on concerns that U.S. lawmakers are still too far apart to avert a fiscal crisis with an end-of-year deadline looming.

DATA/EVENTS (GMT)

0145 China HSBC flash manufacturing PMI Dec

0430 Japan Revised industrial output Oct

0758 France Markit flash manufacturing PMI Dec

0828 Germany Markit flash manufacturing PMI Dec

0858 Euro zone Markit flash manufacturing PMI Dec

0900 Euro zone ECB Financial Stability Review

1330 U.S. CPI Nov

1415 U.S. Industrial output Nov

(Reporting by Manolo Serapio Jr.; Editing by Ed Davies)