* Euro edges up against dollar on Trichet comments
* Upbeat retail sales data lifts Wall Street
* U.S. crude inventories near 10-month high -EIA
(Repeats to fix typo in headline)
(Recasts, updates prices, market activity, new byline, changes
dateline, previously LONDON)
By Gene Ramos
NEW YORK, April 8 (Reuters) - Oil prices fell for the second day
in a row on Thursday as U.S. jobless data and high inventories
outweighed upbeat retail sales data in the world's top energy
consumer.
The number of U.S. workers filing for jobless aid unexpectedly
shot higher last week but did not alter the view that labor markets
are recovering as the jump reflected Easter holiday volatility.
[]
Brimming U.S. crude stockpiles reported by the U.S. Energy
Information Administration fueled bearish sentiment. This kept oil
prices in negative territory after data showing strong U.S. chain
store sales caused crude futures to retrace earlier losses.
U.S. crude <CLc1> traded down 50 cents to $85.38 a barrel, at
12:35 p.m. EDT (1635 GMT), after falling as low as $84.38 early,
while Brent crude <LCOc1> fell 78 cents to $84.81, having dropped to
a session low of $84.20 early.
A report that U.S. comparable chain store sales rose 9 percent in
March boosted the stock market, easing Wall Street's worries about
Greece's debt problems. []
"Equities responded to the retail sales numbers and are helping
bring the energy sector back up. The euro bounced and that helped,"
said Richard Ilczyszyn senior market strategist at Lind-Waldock in
Chicago.
The euro rose against the dollar on Thursday, rebounding after
falling to near its lowest level this year, as European Central Bank
President Jean-Claude Trichet said Greece was not in danger of
defaulting on its debt. []
When the dollar weakens, dollar-denominated commodities, such as
oil, becomes attractive to investors seeking safer havens.
Oil in New York had rallied to an 18-month intraday peak above
$87 on Tuesday after a flurry of positive U.S. economic indicators.
It climbed almost 9 percent in six sessions, before changing
direction on Wednesday.
U.S. crude stocks rose last week to their highest level in nearly
10 months as imports surged, the country's Energy Information
Administration (EIA) said on Wednesday [].
But gasoline supplies fell more than expected and some analysts
say the dip in prices may be short-lived.
Prices may keep rising in coming weeks as U.S. fuel demand
increases with the approach of the driving season from late May to
early September.
"We wouldn't be surprised to be close to $100 this summer," said
Peter McGuire, managing director of Commodity Warrants Australia, in
Sydney.
On the geopolitical front, the United States said on Thursday it
hopes to agree on new punitive measures against Iran over its nuclear
program within weeks, as six world powers prepare to meet in New York
to draft a sanctions resolution. []
Iran's wrangling with the West over its nuclear program, which it
insists is for peaceful purposes and not aimed at producing atomic
weapons has been closely watched in the oil markets for its implied
geopolitical implications.
(Additional reporting by Robert Gibbons in New York, Alex Lawler in
London, Alejandro Barbajosa in Singapore; Editing by David Gregorio)
