* Ten-day winning streak snapped after 15-month high
* China's central bank raises yield in bill auction
* Forecasts of sustained cold weather to underpin prices
* U.S. jobs data due later and on Friday
(Updates prices, adds details)
By David Sheppard
LONDON, Jan 7 (Reuters) - Oil slipped below $83 a barrel on
Thursday, pulling back from a 15-month high a day earlier, as
signs of tighter monetary policy in China sparked concerns about
demand in the engine room of commodity consumption growth.
Crude had shrugged off news of higher U.S. oil inventories
on Wednesday to post its 10th straight session of gains,
extending a near $11 rally on expectations freezing temperatures
across much of the United States would eventually cut into
bulging stocks.
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, hitting commodities across the
board. []
http://graphics.thomsonreuters.com/0110/CN_CMDSL0110.gif
China's rapidly expanding economy and its burgeoning thirst
for oil has been seen as one of the main reasons crude prices
have more than doubled in the past 12 months, despite the
lingering impact of the economic crisis.
U.S. crude for February delivery <CLc1> fell 80 cents to
$82.38 a barrel by 1204 GMT, off Wednesday's 15-month high of
$83.52.
London Brent crude <LCOc1> fell 74 cents to $81.15.
Analysts said investment flows from funds at the beginning
of the new year were also likely to be responsible for part of
the recent rise in prices.
"We still fail to see any compelling fundamental reason why
crude oil prices are where they are -- the weather is cold, but
it was also cold at this time last year when prices plunged to
$33 a barrel," MF Global analyst Edward Meir said.
"We suspect a more logical reason for the rally has to do
with the fact that, egged on by a struggling dollar and a benign
interest rate environment, money is flowing into commodities at
a heady pace."
U.S. RECOVERY
Weekly U.S. jobless claims, due at 1330 GMT, and non-farm
payrolls data on Friday will give some indication of the pace of
recovery in the world's largest energy consumer.
The U.S. labour market is improving and the economy is close
to the point where the unemployment rate will start to fall,
James Bullard, president of the St. Louis Federal Reserve Bank,
said in Shanghai. []
But any demand recovery in the United States 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. []
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.
European 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. []
[]
Price support also came from the continuing talks between
Belarus and Russia over the supply of Russian oil for 2010.
Belarus has insisted Russia should continue billions of
dollars in oil subsidies, complicating talks aimed at resolving
a dispute over a pipeline that brings 10 percent of Europe's
crude. []
(Additional reporting by Jennifer Tan in Singapore; editing by
Sue Thomas)
