UPDATE 3-Oil hovers around $90, looks to U.S. employment

                                
 * Market focusing on Friday's U.S. payroll report
                                
 * Coming Up: Initial U.S. jobless claims; 1330 GMT
                                
 
                                
 (Updates with oil prices, eurozone confidence indicators)
                                
 By Claire Milhench
                                
 LONDON, Jan 6 (Reuters) - Oil hovered around $90 on Thursday
as the dollar strengthened slightly but Wednesday's positive
U.S. private sector payroll data continued to provide support,
raising expectations for a sustained recovery.
                                
 U.S. crude for February <CLc1> was down 33 cents at $89.95 a
barrel at 1205 GMT, but analysts and traders said the market was
still looking towards Friday's U.S. non-farm payroll data, and a
mid-morning dip below $90 was not significant.
                                
 "It's a small change and could easily be reversed," said
Christophe Barret, an oil analyst at Credit Agricole Corporate
and Investment Bank.
                                
 The market ran up quickly on the first trading day of the
year, reaching a 27-month high of $92.58 but slipped as low as
$88.10 on Wednesday, before rebounding with the payroll data
from processing company ADP Employer Services. [ID:nN05284674]
                                
 "The ADP report on private jobs indicated an increase in
December way over any of the most bullish forecasts," said
Olivier Jakob at Petromatrix in a note. 
                                
 Thorbjorn Bak Jensen, an oil market analyst at A/S Global
Risk Management said yesterday's ISM service data had also been
better than expected, helping provide support.
                                
 Eurozone consumer confidence and economic sentiment data
painted a more mixed picture, with the former slipping back in
December from November's 35-month high, whilst economic
sentiment spiked to a 38-month high in December [ID:nLDE7050V4].
                                
 Howard Archer, an economist at Global Insight, said the best
news was a sharp jump in confidence in the industrial sector in
December, fuelled by stronger order books. "There was also a
marked increase in sentiment among retailers," he said in a
note.
                                
 This week's positive U.S. data has boosted the dollar, which
is weighing on oil prices. An appreciation in the greenback
means that commodities priced in dollars become more expensive
for buyers using other currencies.
                                
 But dollar strength has been offset by a
larger-than-expected drop in U.S. crude inventories. Inventories
fell by 4.16 million barrels in the final week of 2010,
according to a weekly report from the Energy Information
Administration on Wednesday. [EIA/S]
                                
 ICE Brent for February <LCOc1> was up 3 cents to $95.53,
U.S. heating oil futures <HOc1> held steady at $2.5392, and
gasoline <RBc1> was up 18 percent at $2.4496.
                                
 China's top refineries started the new year with about 4
percent more crude oil throughput than in December as several
plants revved up operations after maintenance and adding new
facilities, a Reuters poll showed on Thursday. [ID:nTOE70505D]
                                
 The increase follows China's fuel price hike on Dec. 22 when
Beijing raised retail gasoline and diesel prices by about 4
percent and jet kerosene by about 5 percent, boosting refining
margins. [ID:nTOE6BK06W]
 (Additional reporting by Alejandro Barbajosa; Editing by Alison
Birrane)