* Fed to buy around $600 billion in Treasuries until
mid-2011
* Prices target $87, technicals show []
* Coming Up: Eurozone ECB rate decision Nov; 1245 GMT
(Adds Asian markets' reaction, updates prices)
By Alejandro Barbajosa
SINGAPORE, Nov 4 (Reuters) - Oil rose for a fourth straight
day on Thursday, trading near six-month highs, as the dollar
weakened after the U.S. Federal Reserve unveiled a plan to buy
debt and pump more money into the economy.
U.S. crude for December <CLc1> rose 61 cents to $85.30 a
barrel at 0435 GMT, after touching $85.36 on Wednesday, the
highest intraday price since May 4. ICE Brent for December
<LCOc1> gained 56 cents to $86.94.
The U.S. central bank on Wednesday said it would buy around
$75 billion in Treasury bonds per month through mid-2011,
totaling around $600 billion. The dollar weakened about 0.2
percent on Thursday against a basket of currencies. <.DXY>
Wide anticipation of the Fed stimulus measures -- meant to
avert deflation and create jobs by easing long-term borrowing
costs -- boosted the price of oil from mostly within a range of
$72-$80 in September to $80 and above in October and November.
"After the Fed meeting, a trend of weakness in the dollar
will continue, so oil can still move to the upside," said Ken
Hasegawa, a commodity derivatives manager at Japan's Newedge
brokerage.
The Fed's plans are in line with consensus expectations,
but are less aggressive than some polled by Reuters had
anticipated. Estimates for overall Fed asset purchases ranged
from $250 billion to $2 trillion.
Following the Fed's announcement, commodities investors may
return to closer scrutiny of the fundamentals of oil supply and
demand and broad economic indicators, analysts said.
"Some indices of the economy are showing good data
recently, and in addition the inventory of oil has been
reduced. That is also a good factor to buy," Hasegawa said.
FUEL SURPLUS SHRINKS
U.S. stocks of gasoline fell by 2.7 million barrels, while
distillate fuels, including heating oil and diesel, slid by 3.6
million barrels as the country's refineries cut utilisation
rates to the lowest since March, the Energy Information
Administration reported on Wednesday. []
Although fuel stocks fell, U.S. crude stockpiles rose by 2
million barrels last week, EIA figures showed, leaving a major
crude surplus compared to the same period of 2009.
For a graphic: http://link.reuters.com/man63q
The U.S. services sector grew more quickly than expected in
October and factory orders posted their largest gain in eight
months. Also, a report showed U.S. private employers added more
jobs than expected in October. []
More evidence about the state of the U.S. economy, which
would affect future demand, will arrive on Thursday, with
weekly jobless claims data, and Friday, with monthly payrolls
data and the unemployment rate from the Labor Department.
Technical analysis of oil prices, based on trends and
charts, shows a bullish target of $87.04 for U.S. crude remains
unchanged, as per its wave pattern and a channel technique.
"Oil finally went above $85, and now it may go up to $87 or
$88 from a technical point of view as short-covering may be
triggered," Hasegawa said.
"From a fundamental perspective, a price of $90 would be
too high. There is not so much buying interest at that level
and a lot of selling orders would come in."
Asian stocks rose to their highest levels since June 2008
and commodity prices rallied on Thursday after the Fed's new
bond-buying programme kept the hunt on for growth and higher
yields. []
Wednesday's underwhelming financial market response to the
Fed's move is unlikely to dismay central bank officials who
carefully telegraphed the move to avoid market disruptions.
[]
Analysts said markets had widely priced in the Fed move
prior to the announcement, which was for a slightly higher
amount than expected with purchases spread out over a longer
period than anticipated.
(Editing by Manash Goswami)
