* Technicals show new $90-$93 range []
* U.S. employment rise more than expected
(Update prices)
By Ikuko Kurahone
LONDON, Nov 5 (Reuters) - Oil hit a two-year high above $87
a barrel on Friday as fresh U.S. economic stimulus boosted the
appeal of commodities as an asset class in an environment of a
weak dollar and better than expected U.S. jobs data.
U.S. crude futures <CLc1> were trading 40 cents up at $86.89
a barrel by 1248 GMT, having touched $87.22 earlier, the highest
intra-day price since October 2008. So far this week oil has
risen more than six percent.
ICE Brent futures <LCOc1> rose 25 cents to $88.25.
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 currency which is cheap to
borrow and invest elsewhere.
"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.
U.S. employment data, which was closely watched by global
markets, showed non-farm payrolls increased 151,000 in October,
the first increase since May, and trouncing expectations of a
60,000 rise.
The unemployment rate in the world's top energy consumer
was unchanged at 9.6 percent. []
The dollar extended gains from 11-month lows hit on Thursday
against a basket of currencies. [] <=USD><.DXY>
European shares and U.S. stock index futures turned positive
following the jobs data. [][]
"Markets got a little boost from the jobs report, but the
strengthening dollar is offsetting. In addition, the markets
have been up all week and may be running into a little profit
taking," said Tom Bentz, broker at BNP Paribas Commodity Futures
Inc in New York.
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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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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 consumers. []
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.
But some analysts pointed out oil's fundamentals have not
recovered to the levels seen before the financial crisis in 2008
and they 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 a 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,
Robert Gibbons in New York and Zaida Espana in London; Editing
by Keiron Henderson)
