* Fed to buy around $600 bln in treasuries until mid-2011
* Technicals show price target of $87 []
* ECB keeps interest rate on hold at 1 pct
* U.S. jobless claims rise more than expected
(Updates prices, adds detail)
By Emma Farge
LONDON, Nov 4 (Reuters) - Oil topped $86 a barrel on
Thursday and rose to a fresh six-month high, as
higher-than-expected U.S. jobless claims accelerated dollar
losses after a U.S. Federal Reserve decision to pump more money
into the economy of the world's top oil user.
By 1332 GMT, U.S. crude for December <CLc1> was up $1.60 at
$86.29 a barrel, having hit as high as $86.68 earlier. ICE Brent
<LCOc1> rose $1.53 to $87.91.
The dollar extended losses and fell 0.9 percent against a
basket of currencies on Thursday after new U.S. claims for
unemployment benefits rose more than expected last week,
underlining the persistent weakness in the labour market.
[]
"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 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.
The Fed measures were in line with expectations, but less
aggressive than the most bullish estimates of about $2 trillion.
The European Central Bank voted to keep interest rates at 1
percent as expected on Thursday while the Bank of England added
no more stimulus to the economy. [] []
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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 but on Thursday a senior Gulf
source said prices between $70-$80 is still a fair price.
[] []
Many analysts said 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."
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 Alison Birrane)
