* Negative jobs data may reassure investors about Fed action
* Technicals show oil to hover around $83.50
[]
* Coming Up: U.S. weekly initial jobless claims; 1230 GMT
(Adds analyst comment on EIA report, updates prices)
By Alejandro Barbajosa
SINGAPORE, Oct 7 (Reuters) - Oil rose on Thursday to within
a dollar of five-month peaks, supported by expectations that
central banks will ease monetary policy to shore up sluggish
economies and falling U.S. fuel stockpiles.
November U.S. crude <CLc1> rose 26 cents to $83.49 a barrel
at 0423 GMT. ICE Brent <LCOc1> added 26 cents to $85.32.
The prospect of a second round of expansionary monetary
policy, known nowadays as quantitative easing stage two, or
QE2, hangs upon key U.S. employment reports, with weekly
statistics due on Thursday and more comprehensive monthly data
on Friday.
"Whatever the data is, the market may continue to go to the
upper side until early November," said Ken Hasegawa, a
commodity derivatives manager at Japan's Newedge brokerage,
referring to the Fed's next policy-setting meeting on Nov. 2-3.
"It's not easy to develop a short position at the moment
because the trend is higher."
A negative jobs reading on Friday could reassure investors
the U.S. Federal Reserve will take action to reinvigorate the
economic recovery, Hasegawa said.
Private employers in the U.S. cut 39,000 jobs in September,
the largest monthly loss since January, ADP employment data
showed on Wednesday, compared with forecasts for a rise of
24,000 jobs. The ADP private report is sometimes seen as a
preliminary indication for the monthly government figures.
[]
A sinking greenback on Wednesday, linked to the expected
inflow of fresh dollars into the U.S. economy, helped send
front-month U.S. crude <CLc1> to an intra-day peak of $84.09 a
barrel, the highest price since May 4. []
"The U.S. dollar has continued falling and this kind of
trend will be extended forward," Hasegawa said, increasing the
relative purchasing power of dollar-denominated oil for holders
of other currencies.
MIXED INVENTORY REPORT
Adding to the effect of the weaker dollar, U.S. gasoline
inventories fell more than 13 times as much as expected last
week, government statistics from the Energy Information
Administration showed on Wednesday, down 2.65 million barrels
in the week to Oct. 1. []
Distillate fuel supplies, including heating oil and diesel,
declined 1.12 million barrels.
But U.S. crude inventories rose by a larger-than-expected
3.09 million barrels as the nation's refineries cut utilisation
rates, the EIA said.
"The report failed to confirm the recent improvements in
the U.S. oil market, suggesting that the current price strength
is mainly driven by improved macro sentiment and strong
technical momentum," Stefan Graber, a commodities analyst with
Credit Suisse in Singapore, said in an e-mailed note to
investors.
Stocks at the Cushing, Oklahoma, pricing hub for benchmark
West Texas Intermediate (WTI) crude rose for the first time in
nearly two months and were up almost 750,000 barrels last week
at more than 35 million.
The prospect of a broader strike hitting France's refining
operations was also supportive for product prices. Workers at
the country's refineries may join a walkout at a key oil port
on Thursday. []
Asian stocks edged up to a two-year high on Thursday,
supported by resource-related shares, but gains were capped and
the U.S. dollar held near a 15-year low against the yen.
[]
The northern part of the Houston Ship Channel reopened to
inbound and outbound ships Wednesday for the first time in
three days after workers cleared dangling power lines and an
electrical tower leaning over the waterway, the U.S. Coast
Guard said. []
(Editing by Ed Lane, Himani Sarkar)
