Oil rises towards $81; China signals continued stimulus

* China's premier addresses National People's Congress

* Oil trades close to seven-week highs near $81

* Coming up: U.S. non-farm payrolls at 1330 GMT (Adds Strait of Malacca threat, updates prices)

By Alejandro Barbajosa

SINGAPORE, March 5 (Reuters) - Crude climbed on Friday, capping two consecutive weeks of trading above $80, after China signalled it would maintain its economic stimulus, rekindling hopes for accelerating growth to drain excess oil supplies.

China's Premier Wen Jiabao, in his annual address to the National People's Congress, said the world's second-largest oil consumer will continue an appropriately easy monetary stance and an active fiscal policy. [ID:nTOE6230AE]

U.S. crude for April gained 52 cents to $80.73 a barrel by 0810 GMT, after touching a seven-week high of $81.23 two days ago. London ICE Brent for April advanced 49 cents to $79.03.

Asian shares surged after encouraging retail sales and jobs data from the United States suggested Asia's biggest export market was stabilising. Analysts anticipate a report later on Friday to show U.S. non-farm payrolls fell in February because of severe snowstorms. [ID:nN02150933]

"Fundamentally, thanks to the cold weather in the northern hemisphere, stocks including floating storage are decreasing," said Keichi Sano, general manager of research at SCM Securities in Tokyo.

"But the market doesn't look so strong to break above the $85 level," Sano said. "Oil is trading in a very tight range despite recent fear of tightening monetary policy in China or Greece troubles, or upside potential because of Iran tensions."

China escaped the worst of the global slump by ramping up credit, slashing interest rates and launching a 4 trillion yuan ($585 billion) infrastructure programme in late 2008.

But in the past two months, China has restricted the amount of money that banks can lend by enforcing higher cash reserve ratios, aiming to prevent an over-heating of the economy.

DOLLAR

Currency movements have also been a leading factor for oil prices this year. The dollar was steady on Friday against a basket of currencies. <.DXY>

But on Thursday the dollar fell against the euro after comments by the European Central Bank reinforced the view interest rates in the region will remain low in the foreseeable future. [USD/]

A stronger dollar tends to pressure oil because it makes dollar-denominated commodities more expensive for other currency holders.

New York crude has traded in a $69-$84 range over the past few months amid uncertainty about the speed of the global economic recovery. Some traders and analysts say currency movements may play an important role in pushing prices out of those limits.

"I don't think the market can break the range yet, but the euro-dollar is moving quite crazy, so it can eventually give some reason to break," said Sano.

Friday's U.S. employment report is expected to show a loss of 50,000 jobs in February, compared with 20,000 job cuts in January, a Reuters poll of economists shows. But some market watchers said an even greater number of job losses was already priced in to the oil market.

A militant faction in Nigeria's Niger Delta said on Thursday it had blown up an oil facility operated by Italy's Agip , its second attack in as many days, and warned foreign oil companies to leave the region. There was no independent confirmation of the attack. [ID:nLDE6231CC]

Singapore said on Friday it had raised alert levels in the city-state and beefed up security at its airport and new casino resorts after a warning by its navy on Thursday of possible attacks on oil tankers in a key shipping lane. [ID:nSGE62409F] (Editing by Ed Lane)