* Dollar firms, halting boost to oil
* Saudi oil minister sees $70-$80 as "ideal"
* French strikes boost oil products
* Coming Up: OPEC meeting Thursday
(Updates prices, adds details)
By David Sheppard
NEW YORK, Oct 11 (Reuters) - Oil prices slipped towards $82
a barrel on Monday, retreating from a five-month high hit last
week, on signs prices may have run ahead of demand.
Saudi Arabia Oil Minister Ali al-Naimi said prices between
$70 and $80 a barrel were "ideal" as he arrived in Vienna ahead
of OPEC's meeting on Thursday, indicating the producer group's
most powerful member has no plans to pursue higher prices.
Analysts and traders said the fillip to oil prices caused
by expectations of further quantitative easing in the United
States, which helped raise U.S. crude as high as $84.43 a
barrel last week, might have run its course as the dollar
firmed on Monday.
U.S. crude for November delivery <CLc1> fell 45 cents, or
0.54 percent, to settle at $82.21 on Monday. Prices slipped
further in post-settlement trade to hit a low for the day of
$81.85 a barrel,
In London, ICE November Brent crude <LCOc1> fell 32 cents
to settle at $83.71 a barrel, before slipping further to $83.38
a barrel by 4 p.m. EDT (2000 GMT).
"The big factor in the oil market in the past couple of
weeks has been the pricing in of QE2," said Mike Wittner, an
oil analyst at Societe Generale in London, who credited oil's
sustained breakout above $80 at the end of last month to
expectations of QE2.
"However, this pricing in may be coming to an end."
Expectations of QE2 have weakened the dollar, increasing
the prospect that U.S. inflation will rise. A fall in the
greenback boosts the dollar value of oil, which is usually
traded in the U.S. currency. However, on Monday the dollar's
recent downward fall paused. <.DXY>
Ahead of Thursday's production meeting of the Organization
of the Petroleum Exporting Countries, Saudi Arabia, the world's
largest oil exporter and the group's most powerful member, said
the market was well supplied.
"I am comfortable with economic growth. The market is very
well balanced," Saudi Oil Minister Naimi said.
OPEC was unlikely to change oil output targets at this
week's meeting, delegates told Reuters on Sunday, while Qatar
said current oil prices posed no harm to the world economy.
Oil prices for most of this year have stayed in a price
range of $70 to $80 a barrel -- judged by OPEC to be high
enough for producers who need to invest and low enough not to
damage the world's economy.
CHINA TIGHTENS
Oil was relatively unmoved by the news that China, the
world's largest energy user according to the International
Energy Agency, had raised the required reserves of its four
leading state banks to drain cash from the economy.
[]
Amrita Sen, a commodities analyst at Barclays Capital in
London, said the impact on China's energy demand would be
muted.
"Given how energy intensive the Chinese economy is, even
with some soft landing we do not expect this to change," Sen
said.
The market will seek further clues to developments in the
global economy from the release of the minutes for the last
U.S. Federal Reserve meeting on Tuesday, China trade data on
Wednesday and U.S. retail sales for September on Friday.
(Graphic of Reuters-Jefferies CRB index:
http://link.reuters.com/kew48n)
FRENCH DISRUPTION
Prices took some support as a strike at France's top oil
port of Fos Lavera continued into a 15th day on Monday. The
nearby La Mede oil plant said over the weekend it had half
idled its capacity and will fully shut down in a couple of days
because of the disruption to supplies. []
Workers at Petroplus's 154,000-barrel-per-day Petit
Couronne refinery in northern France also started a rolling
24-hour strike over pensions, blocking fuel supplies and
reducing production.
Disruptions to the supply of gasoline and diesel in France
have boosted oil product prices and helped underpin the broader
market, but some analysts cautioned that lower refinery
operations could ultimately weigh on crude prices as less is
used for processing.
Iran increased its official reserves estimate by 18 billion
barrels to 150 billion barrels on Monday, ahead of Thursday's
OPEC meeting. []
The move followed the decision a week ago by Iraq, a fellow
OPEC member, to raise its reserves figure to 143 billion
barrels. []
However, Olivier Jakob of consultants Petromatrix in Zug,
Switzerland, was skeptical that Iran's news would have much
effect on oil prices.
"Everything out of Iran is taken with a pinch of salt. It
was a little bit of a reaction to the Iraqi announcement," he
said.
(Additional reporting by David Turner in London and
Alejandro Barbajosa in Singapore and the OPEC Newsroom in
Vienna; Editing by Walter Bagley)
