* Dollar strength pares early gains
* Chinese Q1 GDP jumps 11.9 percent
* U.S. jobless claims show surprise jump
(Updates prices)
By Emma Farge
LONDON, April 15 (Reuters) - Oil prices edged closer to $86
a barrel on Thursday as the dollar eased off session highs,
while robust economic growth data from China strengthened the
outlook for crude demand.
The euro was set for its largest one-day fall in three weeks
against the dollar as concern about how Greece will manage its
debt resurfaced and helped offset the negative impact earlier of
strong Chinese data on the greenback. []
Oil tends to fall as the dollar rises as it makes
commodities more expensive for buyers using other currencies.
Yet surging economic growth in China could prompt a
revaluation of the yuan, which may prove bullish for oil as it
improves China's buying power of dollar-denominated currencies,
which helped keep crude prices within sight of the 18-month
highs set earlier this month. []
Front-month U.S. crude <CLc1> was roughly steady at $85.90 a
barrel at 1435 GMT after closing higher the previous day. ICE
Brent crude for May rose $1.35 to $87.50 a barrel -- near
18-month highs -- on the day of its expiry.
Brent is trading at a premium to WTI for the fourth
consecutive day due partly to improved demand as the contract
gains credence as an international benchmark. []
"We are looking at the data from China and this is very
supportive for the market," said Christophe Barret, oil analyst
at Credit Agricole Corporate and Investment Bank. "But I think
the growth was anticipated and was already in the prices."
An unexpected 24,000 jump in the number of U.S. workers
filing new claims for jobless benefits and weaker equities
tempered sentiment, but an expansion in New York state
manufacturing to a six-month high gave assurance the recovery
was on track. []
SURPRISE DROP
Oil prices rose more than 2 percent in the previous session,
ending a five-day losing streak after U.S. government data
showed a surprise 2.2 million-barrel drop in U.S. crude stocks.
But the report also showed a larger-than-expected 1.1
million barrel rise in distillate stocks including diesel,
raising questions about the pace of the U.S. exit from
recession. []
"The demand side is going to get more attention with the
macro data coming out of the big consuming countries. Non-OECD
demand, especially from China and other east Asian countries,
has been very strong and the market is waiting for North America
to catch up," said Ben Westmore, a commodities analyst at the
National Australia Bank.
The Organization of the Petroleum Exporting Countries in its
monthly report said economic optimism was driving prices and
that it saw a "very comfortable outlook" for oil fundamentals.
The group also nudged up its forecast for 2010 oil demand
growth.
But for some analysts, prices near $85 a barrel could erode
demand in developed markets and prompt consumers to switch to
cleaner fuels. "If prices remain at these levels for long, they
will have a strong impact on demand," said Barret.
On a technical basis, prices may be due for a small
correction on Thursday but upward momentum is set to stay
intact. For a short-term technical outlook for crude, see here:
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Amanda Cooper)
