* Crude oil prices slip as dollar climbs
* Prices off 2-year highs on profit-taking
* Coming Up: U.S. Employment index Oct; 1400 GMT
(Updates prices, quotes, changes dateline from PERTH)
By Zaida Espana
LONDON, Nov 8 (Reuters) - Oil prices fell towards $86 a
barrel on Monday, easing back from two-year highs reached
earlier in the session, as a stronger dollar prompted
profit-taking.
By 0928 GMT, U.S. crude for December delivery <CLc1> shed 55
cents to $86.30 a barrel, having reached two-year highs of
$87.49 a barrel. ICE Brent <LCOc1> was 61 cents lower at $87.50
a barrel.
The stronger greenback -- which typically trades in negative
correlation with dollar-denominated commodities -- also weighed
on gold prices, pulling them lower from a fresh record of $1.398
an ounce earlier.
"It is a reasonable reaction given the U.S. dollar continues
to strengthen and it was very unlikely that (oil) could continue
to decouple from the U.S. dollar," Commerzbank oil analyst
Carsten Fritsch said.
"If the dollar continues to regain strength, this should
weigh on oil prices and could lead to some profit-taking,"
Fritsch said.
The dollar index <=USD>, a measure of the greenback's
performance against a basket of currencies, rose 0.7 percent to
76.950.
Commodities rallied last week after the U.S. Federal Reserve
unveiled a second round of monetary stimulus, while oil climbed
after a stronger-than-expected jobs report on Friday spurred
expectations of an improving economic outlook for the world's
top oil consumer.
"There are signs of improving economic activity,
particularly from the U.S. with a much better than expected
labor market report which signals that the U.S. economy could
see some moderate re-acceleration in the weeks or months ahead,"
Stefan Graber at Credit Suisse in Singapore.
OIL FUNDAMENTALS- WHERE IS THE SUPPORT?
While the new round of monetary stimulus in the U.S. is
boosting the appeal of commodities, a sluggish but sustained
economic recovery in other industrialized economies and rampant
growth in emerging Asia could fuel demand for energy and raw
materials.
The Reuters-Jefferies CRB index, a global commodities
benchmark, climbed above 313 points on Monday morning trade
<.CRB>.
"Oil, as long as it stays above this area, could be
considered a continued mover on to $90 and plus," said Jonathan
Barratt, managing director at Commodity Broking Services in
Melbourne, but added that he does not see fundamentals
supporting such a price.
(Additional reporting by Rebekah Kebede in Perth; editing by
Anthony Barker)
