* New U.S. weekly unemployment benefit claims data rise
* ECB rates steady at 1 pct as expected
* ECB to extend bank liquidity support until April at least
* China official signals monetary tightening next year
(Updates prices, adds quotes)
By Zaida Espana
LONDON, Dec 2 (Reuters) - Oil prices inched down on Thursday
following an increase in new U.S. claims for unemployment
benefits and after the ECB kept its interest rate unchanged, and
made no commitments to ramp-up its bond purchasing programme.
Front-month U.S. crude oil prices <CLc1> fell by 20 cents to
$86.55 a barrel by 1431 GMT, still within sight of three-week
highs of $87. ICE Brent <LCOc1> futures rose 15 cents to $89.02.
Despite the increase in new weekly unemployment benefit
claims, a drop in the underlying trend suggested an improvement.
[]
This is in line with data on Wednesday showing private
employers added 93,000 new staff in November, the biggest rise
in three years.
Friday's comprehensive non-farm payrolls data is expected to
show a rise in overall nonfarm payrolls of 140,000 last month,
based on a Reuters poll of analysts. []
In Europe, the ECB kept its key interest rate at record lows
of one percent and pledged to extend its liquidity safety net
for banks at least until April next year on continued fears
about the health of some euro zone members.
The central bank said its bond purchasing programme was
ongoing, but made no commitment to increase the pace despite
expectations of further measures to fight the debt crisis.
[]
Up until mid-November, the ECB was expected to withdraw its
bank crisis support mechanism by switching to competitive
auctions, but renewed contagion fears after Ireland's bailout
scuppered plans.
The euro slipped versus the dollar, erasing earlier gains,
after expectations of an increase of bond purchases went
unfulfilled.
"Oil prices are lower because of the stronger U.S. dollar
related to Trichet's comments. Some markets expected he would
say something about increased bond purchases, and that has not
happened, at least in the way market participants had expected,"
Commerzbank analyst Carsten Fritsch said.
"Apart from that, prices are still showing remarkable signs
of strength," Fritsch said, noting that the cold spell in Europe
was supporting Brent prices, widening the differential between
WTI and Brent.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on ECB bond purchases and peripheral spreads
http://graphics.thomsonreuters.com/F/11/EZ_ECBB1110.jpg
For a graphic on euro zone gov deficits and debt in 2011
http://graphics.thomsonreuters.com/F/09/EUROZONE_REPORT2.html
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Prices dipped earlier in the session after a Chinese central
bank adviser said that the country's monetary policy will
tighten steadily next year to counter inflation and excessive
global liquidity. []
"While we are still wary about going long a number of
commodity complexes at these levels, the markets clearly feel
otherwise, buoyed by the positive macro data that has been
streaming out over the last two days," MF GLobal analyst Edward
Meir said, referring to Wednesday's positive job data from the
United States.
PRICE OUTLOOK
U.S. crude oil prices are currently less than $2 away from a
25-month peak of $88.63 reached on Nov. 11, while Brent prices
are shy of the $89 a barrel mark.
"We seem to be close to the top of the trading range, so we
will need something to push it through $90 and cold weather may
not be enough," Christopher Bellew from Bache Commodities said.
Investment bank Goldman Sachs said U.S. crude prices are
likely to average $100 a barrel in 2011 and $110 a barrel in
2012 on the back of a "new structural bull market".
[]
"We expect in 2011 and 2012 that the transition from a
cyclical recovery to a new structural bull market will lead to
new record annual average prices above the 2008 high of just
under of $100 a barrel," Goldman said in a Dec. 1 report.
On Wednesday, U.S. crude oil inventories data from the
Energy Information Administration showed weekly a surprise gain
of 1.1 million barrels. []
"The latest data from the U.S. showed that oil inventories
actually rose amid weakening consumption. This could pose a
risk for prices and limit the upside potential in the coming
days, despite the general improvement in market sentiment,"
Singapore-based Credit Suisse analyst Stefan Graber said.
U.S. gasoline stockpiles rose in line with forecasts last
week; while a weekly 937,000 barrel drop in East Coast gasoline
stocks lifted gasoline futures to an almost seven-month high on
Wednesday.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Alison Birrane)
