Raw materials rally, fuelled by oil, metals gains

* Industrial raw materials rally; eye OPEC cuts, China boost

* Copper, oil up more than 2 pct, rubber surges 7 pct

SINGAPORE, Dec 15 - Industrial raw materials led commodities higher on Monday, as investors anticipated big cuts by oil producer cartel OPEC this week and on hopes that Beijing's plans to reflate its economy will boost demand for base metals.

Sentiment also got a lift from sharp gains in Asian equity markets, declines in the dollar, and hopes that the White House can salvage plans, scuttled by lawmakers on Friday, for a lifeline for U.S. auto industry.

London copper futures bounced more than 2.8 percent and crude oil rose 2.2 percent after China announced plans to boost money supply by 17 percent over the weekend and investors anticipated tighter energy supplies.

U.S. light crude for for January delivery rose $1.04 to $47.34 a barrel by 0630 GMT, having risen earlier to $47.41.

OPEC ministers are in agreement on the need to cut output when they meet on Wednesday in Algeria to prop up sagging prices, OPEC President Chakib Khelil said on Saturday, but declined to say by how much the organisation would cut.

"OPEC's bullish comments on supply cuts, such as 2 million barrels per day, is supporting the price," said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo.

Iran will propose that OPEC cuts its oil output by between 1.5 and 2 million bpd, Iran's oil minister was quoted as saying on Sunday.

China aims to increase its money supply by 17 percent in 2009, Beijing said over the weekend, as it unveiled a broad blueprint for easing financial conditions to help oil the wheels of the world's fourth-largest economy.

"That's a very big increase relative to growth and inflation expectations, and if (banks) can be induced to lend, it should significantly reflate the economy," said Wensheng Peng, economist at Barclays Capital in Hong Kong.

The Beijing order comes amid growing concerns that economic growth could fall below the 8 percent considered necessary to create enough jobs for the millions of people entering the workforce each year, after years of double-digit growth.

Chinese industrial output growth slowed to 5.4 percent in November, the slowest in nine years and well short of forecasts of 7.1 percent rise, data showed on Monday.

Base metals responded positively after Friday's 4 percent body blow to prices after U.S. lawmakers failed to agree on a bailout plan for the embattled auto industry.

London Metal Exchange copper rose 2.8 percent or $90 to $3,265 a tonne. Copper fell 4.4 percent on Friday and prices are down 51 percent so far this year, heading for their first annual decline since 2001 and their biggest-ever loss in dollar terms.

Gold rose 1.25 percent on the back of buoyant Asian stocks and a weaker U.S. dollar. Spot gold rose to $832.25 an ounce, against a late New York's notional close of $820.45.

Asian stocks markets jumped 4 percent on renewed hopes for a bailout of the U.S. auto industry. But the White House said on Sunday it did not expect any announcement on the rescue plan before President George W. Bush returned home from a tour that has included visits to Iraq and Afghanistan.

Spot platinum recovered more than $30 an ounce, recouping losses incurred on Friday, to trade at $836.00 an ounce.

Chicago Board of Trade corn for March delivery rose 3.8 percent to $3.87-¾ per bushel, while wheat for March delivery gained 2.4 percent to $5.25-½ and soybeans for January delivery advanced 1.6 percent to $8.68.

"It is still a case of bigger-picture macros driving these markets although corn gained support on Friday from estimates of lower U.S. plantings," said Toby Hassall, an analyst at Commodity Warrants Australia.

Rubber, which like grains is correlated with oil prices, rallied 7 percent in Tokyo after the world's top three rubber-producing nations agreed over the weekend to cut next year's exports by a sixth.

The benchmark Tokyo Commodity Exchange rubber contract for May delivery stood at 113.8 yen per kg, up 7.6 percent or 8 yen from the previous close. It earlier rose as high as 115.2 yen, the highest since Dec. 9. (Additional reporting by Osamu Tsukimori and Risa Maeda in TOKYO and James Regan and Bruce Hextall in SYDNEY)