* Palm oil set for bull market in 2012 - Mistry * Weak global economy, high premium to Brent to weigh on palm oil - Fry * Palm futures to fall to 3,011 ringgit - technicals (Updates prices, adds comments) By Chew Yee Kiat SINGAPORE, Dec 2 (Reuters) - Malaysian palm oil futures gained on Friday, reversing earlier losses as prospects of lower production and expectations of rising demand overshadowed lingering concerns about the health of the global economy. Industry sources expect lower production in November due to La Nina-driven rains and a seasonal decline in yields, while demand for palm oil is seen picking up soon as China will replenish its stocks ahead of the Chinese New Year festival in January. "It's a tug of war today between local weather play and technical weakness. Next week's focus will shift to the November production numbers," said a Kuala Lumpur-based dealer. Benchmark February palm oil futures on the Bursa Malaysia Derivatives Exchange inched up 0.1 percent to close at 3,062 Malaysian ringgit ($980) per tonne. Overall traded volumes stood at 19,048 lots of 25 tonnes each, thinner than the usual 25,000 lots as the industry attends the Indonesia Palm Oil Conference and Price Outlook 2012. Leading industry ministry Dorab Mistry said at the conference that weaker growth in Southeast Asian palm oil production and normal demand expansion will set the stage for a bull market next year. He stuck to his earlier price forecast for palm oil to hit 3,300 ringgit in January. But another top analyst, James Fry, had a less bullish view. The London-based analyst said prices may come under pressure as a looming global economic recession weighs on Brent crude oil, making the edible oil less attractive for use in competing biodiesel. A price poll carried out at the conference also showed average palm oil prices to fall to 3,115 ringgit a tonne next year, on expectations of output recovery and a bleak global economic outlook. For more stories on the Bali conference, click Reuters analyst Wang Tao maintained a bearish view, expecting palm oil to revisit the Nov. 30 low of 3,011 ringgit per tonne, as a rebound from this level has completed. Production is expected to fall as the Malaysian Meteorological Department issued a yellow stage warning that heavy rain may persist until Saturday and cause floods over low-lying areas in parts of Pahang and Johor -- two key oil palm-growing areas that account for around 30 percent of production in Malaysia. Oil rose towards $110 a barrel on Friday as evidence of a sustained recovery in the United States and rising tension over major oil exporter Iran countered concern about the euro zone debt crisis. In other vegetable oil markets, U.S. soyoil for December delivery gained 0.2 percent while China's most active May 2012 soybean oil contract <0#DBY:> went up 0.1 percent. Palm, soy and crude oil prices at 1005 GMT Contract Month Last Change Low High Volume MY PALM OIL DEC1 3028 -12.00 3005 3035 754 MY PALM OIL JAN2 3053 -9.00 3030 3070 1616 MY PALM OIL FEB2 3062 +4.00 3035 3075 10795 CHINA PALM OLEIN MAY2 7958 -2.00 7924 7980 89494 CHINA SOYOIL MAY2 8820 +10.00 8784 8840 279726 CBOT SOY OIL JAN2 49.81 +0.11 49.65 49.95 5552 NYMEX CRUDE JAN2 100.75 +0.55 99.89 101.09 14811 Palm oil prices in Malaysian ringgit per tonne CBOT soy oil in U.S. cents per pound Dalian soy oil and RBD palm olein in Chinese yuan per tonne Crude in U.S. dollars per barrel

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