* G20 finance ministers may downplay currency conflict
* Technicals show oil may slip to $79 []
* Coming Up: G20 finance ministers meeting
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Oct 22 (Reuters) - Oil rose on Friday as the
dollar weakened, after jobs and business activity data
signalled the U.S. economy would require additional stimulus.
A G20 finance ministers meeting in South Korea looked
unlikely to reach a conclusion on currencies as dollar
volatility rattles commodities markets. []
U.S. crude for December <CLc1> rose 63 cents to $81.19 by
0630 GMT, aided by rising stock markets in Asia, reversing part
of Thursday's drop of more than 2 percent. ICE Brent <LCOc1>
gained 63 cents to $82.46.
Oil was still headed for a second straight week of losses,
though marginal, responding to a rising dollar on track for its
first week of gains in six weeks. A stronger dollar raises the
cost of oil imports for buyers excluding top consumer the
United States.
Despite intra-day volatility, oil prices have so far this
month remained in a relatively tight range slightly wider than
$5, between Tuesday's low of $79.25 after China raised interest
rates and a five-month peak of $84.43 on Oct. 7.
"For the last three or four months, we saw a big decline
in the U.S. dollar, and now lots of people see that it will be
time for a rebound or to see a correction," said Ken Hasegawa,
a commodity derivatives manager at Japan's Newedge brokerage.
"But if the Fed in November shows big stimulus plans, that
will send the dollar even lower. Participants have no
confidence about price direction. It's still a rangebound
market."
WEAKNESS MEANS STIMULUS
A batch of U.S. data on Thursday painted a picture of an
economy stuck in slow-growth mode, reinforcing views the
Federal Reserve will ease monetary policy further next month to
try to reinvigorate the recovery. []
New claims for jobless benefits dropped last week but
remained at levels suggesting little improvement in the
distressed labor market. Other reports showed only a modest
rise in a gauge of future U.S. economic activity and a small
gain in factory activity in the country's Mid-Atlantic region.
Oil's gains on Friday also came on the back of rising
equities in Asia, Hasegawa said, supported by the technology
sector.
Crude prices this week became increasingly correlated with
currency movements, but the link is still stronger for other
commodities like gold.
For a graphic of oil and gold's correlation to the dollar:
http://graphics.thomsonreuters.com/AS/0810/ABE_20102210125914.j
pg "Gold is much more similar to a currency than crude
oil," Hasegawa said. "The market is still driven by
fundamentals. Of course there is some movement caused by money
factors, but inventories are very high. Therefore, the upside
is limited."
A record influx of crude oil into China last month far
surpassed the needs of the country's refining sector, leaving
an apparent surplus of 1.5 million barrels per day, according
to Reuters analysis of Chinese data. []
The U.S. dollar dipped in Asian dealings on Friday after a
volatile session in New York but was seen supported, with
investors likely to trim short positions on caution ahead of a
G20 finance ministers' meeting in Gyeongju. []
(Editing by Clarence Fernandez)
