UPDATE 3-Oil slips as dollar rises on Korea, euro crisis

                                
 * Dollar, treasuries jump on Korean artillery exchange
                                
 * Irish debt crisis puts euro under pressure
                                
 * European, Asian stocks fall, U.S. futures down
                                
 * Coming Up: API oil inventory data; 2130 GMT
 
                                
(Updates detail, prices, changes dateline, pvs SINGAPORE)
                                
 By Christopher Johnson
                                
 LONDON, Nov 23 (Reuters) - Oil fell towards $81 on Tuesday
as the dollar gained after a major exchange of artillery fire on
the Korean peninsula and as the euro fell on fears Ireland's
debt crisis may lead to problems elsewhere in Europe.
                                
 North Korea fired dozens of artillery shells at a South
Korean island, setting buildings on fire and provoking a return
of fire by the South, Seoul's military and media reports said.
[ID:nL3E6MN09Z]
                                
 European stock markets, which financial bookmakers had been
calling flat before the Korean news broke, opened down, with the
FTSEurofirst 300 <.FTEU3> down 0.4 percent and Britain's FTSE
100 <.FTSE> down 0.6 percent. [.EU]
                                
 U.S. crude for January <CLc1> shed 20 cents to $81.54 a
barrel by 0903 GMT, after having dropped 71 cents on Monday. ICE
Brent <LCOc1> was down 9 cents to $83.87 a barrel.
                                
 News of the Korean exchange of fire sent U.S. 10-year
Treasury futures <TYc1> rising and the Japanese yen <JPY=>
falling. The dollar index against a basket of currencies <.DXY>
gained around 0.35 percent.
                                
 Oil and commodities often move inversely to the dollar,
partly because many of them are priced in the U.S. currency.
                                
 "This is a trigger for the 'risk off' button. You'll
certainly see selling in risk-based markets like equities and
commodities until we get a better read on events," said Mark
Pervan, senior commodities analyst at ANZ in Melbourne.
                                
 Jeong My-Young, foreign exchange strategist at Samsung
Futures, said the Korean incident prompted investors to close
dollar short positions against all currencies.
                                
 "This kind of incident can trigger automatic stop-loss
selling of non-dollar currencies," he said.
                                
 The euro <EUR=> earlier fell to as low as $1.3524, coming
under pressure as political uncertainty in Ireland and worries
about other heavily indebted members of the 16-nation bloc
snuffed out optimism over a bailout plan for Dublin.[MKTS/GLOB]
                                
 "Further oil market volatility cannot be excluded as Irish
domestic political developments may yet slow the negotiation of
the aid package with the EU/IMF, and that attention will at some
point shift its focus to other euro zone economies," JPMorgan
analysts said in a note.
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 For a map showing where the artillery exchange on the Korean
peninsula took place, click:
                                
 http://graphics.thomsonreuters.com/RNGS/2010/NOV/KOREA.jpg
                                
 For a graphic of the components of Reuters Jeffries CRB
Index of commodities, click:
                                
 http://link.reuters.com/kew48n)
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 Irish Prime Minister Brian Cowen defied pressure to quit on
Monday, saying he would stay in office until parliament passed
an austerity budget needed to secure the IMF/EU bailout, which
could total 80 billion to 90 billion euros, and then call an
early election. [ID:nLDE6AL00M]
                                
 
                                
 DROP IN CRUDE STOCKS
                                
 Hopes of a drawdown in U.S. crude stocks in the week to Nov.
19, reflecting better demand at the world's top energy consumer,
may support prices.
                                
 Industry data from the United States due at 2130 GMT is
expected to show a third week of decline for crude inventories
following a surprise heavy drawdown in the previous week, a
Reuters poll showed on Monday. [EIA/S]
                                
 Traders are also watching the impact of a disruption to some
of Shell's crude oil production in Nigeria.
                                
 Nigerian output of Bonny Light crude has fallen by about
100,000 barrels per day (bpd) to between 210,000 and 220,000 bpd
after a damaged pipeline led Shell to declare a force majeure on
exports on Friday. [ID:nLDE6AL155]
                                
 The market is also keeping an eye on the political situation
in Saudi Arabia as the country's ageing King Abdullah arrived in
the United States for medical treatment on Monday, while a frail
Crown Prince Sultan hurriedly returned from abroad to govern the
world's largest oil exporter. [ID:nN2282658]
 (Additional reporting by Florence Tan in Singapore; editing by
Jane Baird)