* U.K., France may give out statement on Ireland on Friday
* Technicals show oil headed towards $86.34 []
* Coming Up: IEA November oil market report
(Adds context on Irish concerns, G20 summit)
By Alejandro Barbajosa
SINGAPORE, Nov 12 (Reuters) - Oil dropped more than 1
percent on Friday as concerns about Irish debt sent investors
scrambling for the safety of the dollar, unwinding positions
across commodities.
U.S. crude for December <CLc1> fell $1.01 to $86.80 a
barrel at 0252 GMT, after touching a 25-month intra-day peak of
$88.63 on Thursday. ICE Brent <LCOc1> slid 88 cents to $87.93.
Attention in the oil market re-focused on risk aversion and
macroeconomic concerns at the end of a week when price action
has been dominated by the fundamentals of the crude market,
with Chinese demand at a record and U.S. inventories plunging.
The euro extended losses on Friday on fears Ireland may
need a bailout just like Greece, sending the dollar up more
than 0.1 percent against a basket of currencies. []
<.DXY>
"It's just a correction after the big rebound the euro had
against the U.S. dollar," said Ken Hasegawa, a commodity
derivatives manager at Japan's Newedge brokerage.
"The big issue is the worries about Ireland's economy. It
seems to be worse than expected, and that is the reason why the
euro is falling. In addition, technically some selling orders
have been triggered across all commodities."
U.S. crude's Relative Strength Index (RSI) edged up to
67.74 at the close on Thursday, approaching the 70 level that
is usually interpreted as a signal the market is overbought and
subject to a price correction.
Traders slowed their selling of euros a bit on Friday after
knocking the currency down 4 cents in the past week, squaring
up before a statement about Ireland that may be issued by
Britain and France later in the day. []
"We saw big gains in the euro and commodities as well, then
it is not so surprising if the market goes down suddenly,"
Hasegawa said. "If some bad news comes into the markets, prices
will fall again."
Concerns about Ireland overshadowed a Group of 20 leaders'
summit in Seoul, where a breakthrough on resolving global
economic imbalances amid incongruent policies looked
unattainable. []
Oil had rallied for most of the past two weeks, partly on
OPEC's signals that it can tolerate higher oil prices and on a
plan by the U.S. Federal Reserve to buy $600 billion in
Treasury bonds to help speed economic growth.
China's industrial production grew 13.1 percent in October
from a year earlier, sending oil usage in the world's second
biggest consumer to a record 8.92 million barrels per day
(bpd). [] []
Chinese demand was fueled mainly by a record refinery
throughput of 8.72 million bpd, up 12.2 percent from a year
earlier, as reported by the National Statistical Bureau on
Thursday.
The Organization of the Petroleum Exporting Countries
raised its forecast of global oil demand next year by about
310,000 bpd to 86.95 million bpd, and increased its estimate of
consumption this year by around 190,000 bpd, to 85.78 million
bpd. []
(Editing by Ed Lane)
