* Fed to buy around $600 bln in treasuries until mid-2011
* Technicals show price target of $87 []
* Coming Up: Eurozone ECB rate decision; 1245 GMT
(Recasts, previous LONDON)
By Emma Farge
LONDON, Nov 4 (Reuters) - Oil rose on Thursday for a fourth
day, hitting fresh six-month highs near $86 a barrel, after the
dollar fell following a U.S. Federal Reserve decision to pump
more money to stimulate the economy of the world's top oil user.
The dollar fell around 0.8 percent against a basket of
currencies, triggering a commodities rally as investors sought
alternatives to cash. <.DXY>
The U.S. central bank on Wednesday said it would buy around
$75 billion in Treasury bonds each month through mid-2011,
totalling around $600 billion.
By 1106 GMT, U.S. crude for December <CLc1> was up $1.09 at
$85.78 a barrel after earlier touching $86.05. ICE Brent <LC0c1>
rose 99 cents to $87.37.
"The market is on an upwards track," said Roy Jordan, oil
analyst at Facts Global Energy.
"The quantitative easing (QE) is expected to weaken the
dollar and as the dollar weakens people start thinking about
putting their money into commodities to offset the currency and
it's cheaper for importing countries to buy crude."
The Fed measures were in line with expectations, but less
aggressive than the most bullish estimates of about $2 trillion.
Later on Thursday, the Bank of England (BoE) and the
European Central Bank will both meet on monetary policy and
neither is expected to change rates from near record lows.
The BoE is likely to reject a new bout of quantitative
easing on Thursday, with UK inflation and unemployment levels
comparing favourably to the United States. []
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Graphic on the impact of QE on commodities and currencies:
http://graphics.thomsonreuters.com/F/10/GLB_MKTQEP.html
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HIGHER PRICE RANGE
Wide anticipation of the Fed stimulus measures -- meant to
avert deflation and create jobs by easing long-term borrowing
costs -- in October drove oil prices out of their previous range
between $70-$80 a barrel.
Top oil exporter Saudi Arabia earlier this week shifted its
price range up to $70-$90 a barrel. []
Most analysts think that fluctuations in the dollar will
remain the principal driver in the oil market, although some
have warned of long-term dangers of QE for Asian demand growth.
"We have trouble seeing how much longer the current run can
extend to, given that at some point, higher commodity prices
will lead to even higher inflation and interest rates in
emerging countries," said Edward Meir, analyst at MF Global,
adding that the dollar was currently the "sole driver."
Weekly jobless claims data out of the United States due at
1230 GMT are expected to offer further insights into the state
of the economy.
U.S. data the previous session showed a slow-paced economic
recovery was beginning to gain some momentum, with private
employers adding more jobs than expected in October after laying
off workers in the previous month. []
On the supply side, U.S. crude inventories rose by a
more-than-expected 1.95 million barrels last week as refinery
utilisation dropped, according to a weekly report from the
Energy Information Administration on Wednesday. []
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
