UPDATE 1-Oil rebounds to $81 as European debt woes ease

                                
 * Ireland agrees to work with EU, IMF on debt crisis
                                
 * Technicals show oil rebound to $82[ID:nSGE6AH00O]
                                
 * Coming Up: U.S. weekly initial jobless claims
 (Adds widening WTI-Brent differential, graphic, comment)
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, Nov 18 (Reuters) - Oil rebounded from four-week
lows on Thursday as a weaker dollar and cautious optimism about
Ireland's debt crisis rekindled interest in commodities, while
a sharp crude inventory decline in top consumer the United
States supported prices.
                                
 Front month U.S. crude on Wednesday touched $80.06 a
barrel, the lowest intra-day price since Oct. 20, capping a
four-session drop that knocked off about 8 percent from a
25-month high of $88.63 a week ago amid concerns about European
sovereign debt and a potential increase in Chinese interest
rates.
                                
 The December contract <CLc1> on Thursday rose 89 cents to
$81.33 at 0439 GMT. ICE Brent <LCOc1> gained 98 cents to
$84.26.
                                
 Ireland agreed on Wednesday to work with a European
Union-IMF mission on urgent steps to shore up its shattered
banking sector, a process that could lead to a bailout despite
Dublin's deep reluctance. [ID:nLDE6AG004]
                                
 "There is concern about Europe, but markets have already
priced that in quite aggressively in the past few days," said
Mark Pervan, a senior commodities analyst at ANZ in Melbourne.
                                
 "This is a bit of a buy-on-the-dip story, with equity
markets giving a reasonable guide in Asia. Inventory data was
put to the side yesterday, but the crude numbers look pretty
good and today's move could be a late response."
                                
 U.S. crude stocks plunged the most in more than 14 months
last week as fewer imports and higher refining rates slashed
inventories, according to a weekly government report from the
Energy Information Administration on Wednesday. [EIA/S]
                                
 WTI DISCOUNT WIDENS
                                
 Inventories fell unexpectedly by a sharp 7.29 million
barrels to 357.6 million in the week to Nov. 12, while crude
imports fell 226,000 barrels per day (bpd) to 7.83 million bpd.
                                
 Stocks of oil products also fell, although more closely in
line with analyst expectations. Gasoline fell by 2.66 million
barrels, versus forecasts for an 800,000-barrel draw, while
distillate stocks declined 1.11 million compared with a
projected 2.2-million drop.
                                
 But crude inventories at the key Cushing, Oklahoma hub rose
1.27 million barrels to 33.07 million, depressing the value of
U.S. crude relative to European benchmark Brent. For a graphic:
http://graphics.thomsonreuters.com/AS/0810/ABE_20101811122926.jp
 g    Cushing is the delivery point for the New York Mercantile
Exchange's benchmark West Texas Intermediate (WTI) crude
futures. Stockpiles at Cushing will probably keep rising for
the rest of the year, in line with seasonal norms, according to
JP Morgan oil analyst Sung K. Yoo.
                                
 The dollar dipped against the euro on Thursday after
subdued U.S. inflation supported the Federal Reserve's case for
quantitative easing, while Asian equities stabilised after an
eight-day sell-off. The greenback slid almost 0.4 percent
against a basket of currencies. [USD/] <.DXY>
                                
 U.S. government figures showed the lowest core annual
inflation rate on record and a steep drop in housing starts
from already depressed levels. The data implied the Fed would
carry on buying Treasuries. [MKTS/GLOB]
 (Editing by Clarence Fernandez)