* Dollar near 11-month lows against basket of currencies
* Technicals show new $90-$93 range []
* Coming Up: U.S. non-farm payrolls for October; 1230 GMT
(Update prices)
By Ikuko Kurahone
LONDON, Nov 5 (Reuters) - Oil eased from a two-year high on
Friday, but losses were limited by the new round of U.S.
economic stimulus, which has boosted the appeal of commodities
as an asset class in an environment of a weak dollar.
U.S. crude futures <CLc1> were down 12 cents at $86.37 a
barrel by 1128 GMT, having touched $87.22 earlier, the highest
intra-day price since October 2008.
ICE Brent futures <LCOc1> dipped by 25 cents to $87.75.
Investor appetite for risk is expected to continue grinding
down the low-yielding dollar after the U.S. Federal Reserve's
commitment this week to open-ended purchases of Treasuries
renewed the focus on the dollar as a funding currency.
"The issue that we have to look at is the financial side and
the injection of money," said Tetsu Emori, a fund manager at
Tokyo-based Astmax Co Ltd.
The dollar was mired near 11-month lows against a basket of
currencies. [] <=USD><.DXY> A declining dollar boosts the
appeal of commodities as a way to preserve value.
The Reuters-Jefferies CRB index <.CRB>, a global commodities
benchmark, rose above 312 points on Thursday to its highest
since October 2008.
Gold, a traditional haven for investors shunning dollars and
hedging against inflation, was above $1,380 an ounce, just below
a record high of above $1,390 an ounce <XAU=>. []
Later on Friday, the market focus will shift to a monthly
U.S. jobs report. Employment probably increased in October for
the first time since May, a Reuters survey showed.
European shares dipped as investors took profit from
six-month highs hit earlier on Friday ahead of the jobs data.
[]
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For more on the Fed decision, click: []
For a PDF on what comes after the Fed decision:
http://r.reuters.com/cyh73q
FACTBOX on policymaker reaction to Fed: []
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JP Morgan on Thursday raised its price forecasts for U.S.
crude in 2011 by more than $7 to $89.75 a barrel, while the bank
projects Brent will average $2 higher.
The price of oil has recovered almost half the ground lost
between a mid-2008 record high and the low at the deepest point
of the recession.
It was approaching the top of a $70-$90 price range, which
Saudi Arabia's oil minister Ali al-Naimi earlier this week said
was acceptable to both producers and consumers. []
But some analysts pointed out oil's fundamentals have not
recovered to the levels seen before the financial crisis in
2008.
However, some analysts cautioned whether the rally in oil
prices would be sustainable.
"Although we are up again as of this writing in a number of
commodity markets, including energy, 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," MF Global
said in its research note.
"Over the last few weeks, we have seen many Asian economies
raise rates already, and there is talk that China may be poised
to move again."
(Additional reporting by Alejandro Barbajosa in Singapore
and Zaida Espana in London; Editing by Alison Birrane)
