UPDATE 1-Oil below $83 after China signals tigher policy

                                
 * China's central bank raises yield in bill auction
                                
 * Higher yield may signal monetary tightening
                                
 * Forecasts of sustained cold weather to underpin prices
                                
 * US jobs data due later and on Friday to offer trading
cues
 (Updates prices, dollar, equities)
                                
 By Jennifer Tan
                                
 SINGAPORE, Jan 7 (Reuters) - Oil fell below $83 a barrel on
Thursday, after a 15-month high a day earlier, as worries about
monetary policy tightening in China knocked commodities across
the board.
                                
 Crude managed to shrug off news of higher U.S. stocks to
post its 10th straight day of gains on Wednesday, buoyed by
forecasts of a bigger inventory drawdown next week due to
freezing temperatures across much of the United States.
                                
 But China's central bank surprised markets by raising the
interest rate in a 3-month bill auction, which the markets took
as a signal of policy tightening, a move that hit all
commodities, especially industrial metals. [ID:nTOE60604H]
                                
 U.S. crude for February delivery <CLc1> fell 63 cents to
$82.55 a barrel by 0640 GMT, off a morning high of $83.36, and
after settling at $83.18, its highest close since Oct. 9, 2008.
                                
 London Brent crude <LCOc1> fell 59 cents to $81.30.
                                
 Further clues to trading will come from U.S. employment
data.
                                
 Weekly U.S. jobless claims, due later at 1330 GMT, as well
as December non-farm payrolls data, due on Friday, will show
the outlook for the recovery of the world's largest economy,
interest rates, and the dollar's direction.
                                
 Economists forecast a total of 447,000 new filings for
first-time claims for jobless benefits in the week ended Jan.
2, compared with 432,000 in the prior week.
                                
 The U.S. labour market is improving and the economy is
close to the point when the unemployment rate will start to
fall, James Bullard, president of the St. Louis Federal Reserve
Bank said in Shanghai. [ID:nBJC002452]
                                
 But any demand recovery in the world's top energy user
appears patchy so far. U.S. Energy Information Administration
(EIA) data released on Wednesday showed an unexpected
1.3-million-barrel increase in crude oil stockpiles last week,
while stockpiles of distillates, including heating oil, fell by
a smaller-than-projected 300,000 barrels. [EIA/S]
                                
 GLOBAL COOLING
                                
 Arctic winds have pushed down into the Northern Hemisphere,
freezing Europe and parts of Asia, and boosting demand for
heating in the United States by some 21 percent above normal.
[ID:nN04235377]
                                
 Energy demand has also surged, especially in Britain and
France, while heavy snow and record low temperatures in China
prompted cities across eastern and central parts of the country
to begin rationing power. [ID:nLDE6050N2] [ID:nTOE605026]
                                
 Price support also came from the continuing talks between
Belarus and Russia over the supply of Russian oil for 2010.
                                
 Belarus earlier insisted Russia should continue billions of
dollars in oil subsidies, potentially complicating talks aimed
at resolving a dispute over a pipeline that brings 10 percent
of Europe's crude to market. [ID:nN06150609] 
 (Editing by Michael Urquhart)