* Dollar strength amid euro dip helps pressure oil
* Libya, Gulf delegate say no output boost needed
* Coming up: API oil inventory data, 4:30 EST Tuesday
(Recasts, updates prices and market activity, new byline
and changes dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Nov 8 (Reuters) - U.S. oil prices slipped on
Monday as a stronger dollar and the euro's weakness amid
renewed euro zone debt concerns helped pull oil from a two-year
peak above $87 a barrel.
The euro fell as investors fretted anew about budget
problems in Ireland and other euro zone weak links. Last week's
better-than-expected U.S. jobs data also prompted dollar
purchases, strengthening the dollar index <.DXY> measuring the
greenback against a basket of currencies. []
The dollar fell to a 9-1/2 month low against the euro after
last week's Federal Reserve announcement that the central bank
would buy $600 billion of Treasuries by mid-2011 to lower
interest rates and reinvigorate a sluggish economy.
U.S. crude for December delivery <CLc1> fell 30 cents to
$86.55 a barrel at 11:54 a.m. EST (1654 GMT), off its earlier
$87.49 intraday peak, the highest price since $89.82 was struck
on Oct. 9, 2008.
Monday's pull back by oil stalled at Friday's $85.96 low, a
broker noted.
U.S. crude prices on Friday marked five straight higher
settlements and posted a 6.6 percent gain for the week, the
biggest percentage gain since the week to Feb. 19.
ICE December Brent crude <LCOc1> fell 11 cents to $88 a
barrel.
"After the strong surge in risk appetite last week, it
seems like reality and profit-taking are kicking in today.
Global equities are in the red, and oil is slightly lower but
still close to a two-year high," Danske Market analysts wrote
in a note to clients.
Current anxiety over euro zone debt focused mainly on
Ireland. The cost of protecting Irish government debt against
default rose on Monday, as did equivalent insurance for Spain.
The Dow and S&P 500 fell on Monday after hitting two-year
highs last week as a stronger dollar weighed on the market
although the tail winds of monetary easing and signs of a
stronger economy limit losses. []
"Following the common pattern of recent weeks, crude fell
off from two-year highs as the U.S. dollar strengthened," J.P.
Morgan's commodities team said in a research note on Monday.
J.P. Morgan's note also said the bank expects strength in
Asia to drive prices higher going forward.
The dollar's recent slide has concerned producers as the
value of greenbacks received for dollar-denominated oil
diminished even as prices for other commodities bought by OPEC
producing countries, such as grains, were on the rise.
A stronger dollar can pressure oil prices by improving the
value of dollar's paid producers and by sending investment to
other markets chasing better returns.
Libya's top oil official and an delegate from one of OPEC's
Gulf members said on Monday they saw no need for OPEC to boost
output targets at its December meeting. []
"While the price is inching up, we think the terms of trade
are going against OPEC countries and the increase in the price
did not even compensate for the loss in the dollar value and
the increase in the price of commodities," said Shokri Ghanem,
chairman of Libya's National Oil Corporation.
Qatari Oil Minister Abdullah al-Attiyah said on Monday that
the oil market was stable and that countries would have to live
with higher prices. []
"I think the market is very stable, but we are seeing high
inventories in other countries," he told reporters on the
sidelines of an industry event in Doha.
Last week he said that $70 to $90 per barrel was very
reasonable for consumers and producers, echoing a similar
comment about that price range from Saudi Oil Minister Ali
al-Naimi. []
The International Monetary Fund also voiced a lack of
concern about higher oil prices. A senior official on Saturday
said the IMF does not see a rise in oil prices as a threat to
the global economic recovery. []
(Additional reporting by Rebekah Kebede in Perth and Zaida
Espana in London; Editing by Lisa Shumaker)
