* Concerns about Irish debt pressure equities, commodities
* China equities fall on rate hike talk, weighs on oil
* IEA trims 2011 oil demand growth estimate, raises 2010
* Coming Up: US retail sales, business inventories Monday
(Recasts, updates prices and market activity, new byline and
changes dateline from LONDON)
By Robert Gibbons
NEW YORK, Nov 12 (Reuters) - Oil prices slumped more than 3
percent on Friday, recoiling from a 25-month high, amid a broad
commodities rout on fears that China may raise interest rates
to brake its economy and concerns about the euro zone economy.
Profit-taking struck the market as traders said oil's near
8 percent gain over the past two weeks may have gotten ahead of
fundamentals, despite news this week of record Chinese demand
in October and big declines in U.S. crude and fuel stocks.
Volume was average, however, suggesting only moderate
liquidation.
Friday's pull-back followed the biggest drop in the
Shanghai composite index <> in more than a year on the
talk of Chinese interest rate increases after inflation sped to
a 25-month high in October and bank lending roared past
expectations. Earlier, China raised bank reserve requirements.
U.S. crude for December delivery <CLc1> fell $2.80, or 3.19
percent, to $85.01 a barrel at 1:30 p.m. EST (1830 GMT), with
total crude trading volume already above half million lots.
Prices were on track for a weekly loss after last week
posting their strongest weekly percentage gain since February.
In London, ICE December Brent crude <LCOc1> fell $2.60 to
$86.21 a barrel.
"Much of this liquidation appears prompted by growing
expectations that China is poised for another interest rate
hike," Jim Ritterbusch, president at Ritterbusch & Associates
in Galena, Illinois, said in a note.
The International Energy Agency, an adviser to 28
industrial countries, predicted on Friday a slowdown in the
rate of growth in global oil demand next year, while raising
its forecast for this year, unsettling traders, who are looking
for a more sustained recovery in global demand. []
"When you look at the fundamentals, although improving
during the week, they are not really supporting a very strong
increase in oil prices as we have had," said Christophe Barret
of Credit Agricole.
Oil vacillated, tracking the euro much of the day,
deepening losses as the dollar bounced when greenback buying
was sparked by the uptick in Treasury yields. []
Prices of U.S. Treasuries fell on Friday as the first day
of heavy purchasing by the Federal Reserve failed to jump-start
wider demand for low-yielding government debt. []
While euro zone debt concerns had been overshadowed by news
from China and signs of improving fundamentals, commodity
markets appeared to pay more heed on Friday.
Other commodity markets also plunged from multi-year highs,
with Ireland's debt woes and this week's spate of
exchange-imposed higher margin requirements adding to
investors' growing risk aversion.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a timeline on the eurozone crisis:
http://link.reuters.com/kar27p
Euro zone struggles with debt graphic:
http://r.reuters.com/hyb65p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
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. []
(Additional reporting by Gene Ramos in New York, Alex Lawler
in London and Alejandro Barbajosa in Singapore; Editing by
Walter Bagley)
