UPDATE 7-U.S. oil dips on euro woes in thin volume trade

                                
 * Dollar strength, battered euro pressure oil prices
                                
 * US/Canada crude pipeline slowdown limits oil losses
                                
 * Coming up: CFTC commitments report delayed to Monday
 (Recasts, updates with settlement prices, market activity)
                                
 By Robert Gibbons
                                
 NEW YORK, Nov 26 (Reuters) - U.S. oil prices edged lower in
light post-holiday trading on Friday, pressured as Europe's
debt crisis pushed the euro to a two-month low against the
dollar but with pipeline and refinery snags and geopolitical
tensions helping limit oil's losses.
                                
 Oil prices seesawed as U.S. crude trading volume totaled
only 243,802 lots, well below the 465,481 lots traded on the
2009 post-Thanksgiving Friday and 62 percent below the 30-day
average.
                                
 The dollar index <.DXY> hit a two-month high and the euro
<EUR=> fell to a two-month low against the greenback as euro
zone debt worries intensified. [FRX/]
                                
 Commodity-related shares led U.S. equities lower, as
investors unloaded risky assets on worries that euro-zone debt
problems may continue to spread. [.N]
                                
 "It was a relatively strong performance for crude given the
rally in the dollar and the slip in the S&P. A bullish market
sentiment has investors focusing on bullish news and ignoring
bearish news," said Tim Evans, energy analyst at Citi Futures
Perspective in New York.
                                
 U.S. crude oil for January delivery <CLc1> fell 10 cents to
settle at $83.76 a barrel, well above its $82.78 low.
                                
 Front-month crude futures ended $2.25, or 2.76 percent,
higher on the week, snapping a string of two weekly losses.
                                
 The front-month crude price has not dropped below $80 since
Oct. 20 and has seesawed after reaching a 25-month peak at
$88.63 on Nov. 11.
                                
 In London, ICE January Brent crude <LCOc1> fell 52 cents to
settle at $85.58 a barrel.
                                
 As the euro was kept under pressure and the dollar
strengthened amid the euro zone debt crisis, European officials
denied reports on Friday that Portugal faced pressure to seek a
bailout and Spain ruled out needing help to manage its
finances. [ID:nLDE6AP08Y]
  <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  For a graphic of euro zone struggles with debt, click:
  http://r.reuters.com/hyb65p
  For a graphic comparing euro zone peripheral economies:
  http://r.reuters.com/zem66q
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 A stronger dollar typically pressures oil prices as it
boosts the value of greenbacks paid to producers for
dollar-denominated oil while making it more expensive for
consumers with other currencies.
                                
 "We viewed the ability of the crude market to maintain
Wednesday's strong 3 percent price gains as impressive given
today's two-month lows in the euro and the significant weakness
in today's equity markets," Jim Ritterbusch, president at
Ritterbusch & Associates in Galena, Illinois, said in a note.
                                
 Helping limit oil losses on Friday was news a power outage
forced Enbridge Inc <ENB.TO> to cut flows on its 670,000
barrel-a-day, Line 6A, Canada-to-U.S. crude oil pipeline by
about a third, according to market sources. [ID:nN26122553]
                                
 U.S. gasoline futures ended lower, but also seesawed and
posted intraday gains amid refinery snag news as Tuesday's
December refined products contract expirations approached.
                                
 Brokers and traders also pointed to geopolitical concerns
limiting oil losses.
                                
 The Korean peninsula remained tense as China warned against
military acts near its coast ahead of U.S.-South Korean naval
exercises that North Korea, days after shelling a South Korean
island, said risked pushing the region to war. [ID:nL3E6MQ058]
                                
 Chinese Foreign Minister Yang Jiechi later said China was
determined to prevent a repetition of this week's violence
after meeting North Korea's ambassador to Beijing.
[ID:nBGNQME658]
                                
 While China wrestled with geopolitical tensions, the
country's top economic planning body, the National Development
and Reform Commission, on Thursday said a crackdown on
commodity prices had contributed to a widespread fall in
futures in the last two weeks. [ID:nTOE6AO031]
                                
 China's commodities exchanges have announced measures to
raise margin requirements to curb speculation. [ID:nSGE6AO0G6]
                                
 Adding to investors' caution, Saudi Arabia, with elderly
King Abdullah in the United States after surgery, said it had
captured al Qaeda militants in recent months who were raising
money and recruiting members. [ID:nLDE6AP18D]  
 (Additional reporting by Christopher Johnson in London and
Florence Tan in Singapore; Editing by Dale Hudson and Sofina
Mirza-Reid)