* Prices off two-year high on risk aversion -analyst
* Technicals show oil may retrace to $85.65 []
* Coming Up: U.S. API oil inventories; 2130 GMT
By Alejandro Barbajosa
SINGAPORE, Nov 9 (Reuters) - Oil fell for the first session
in seven as concern about euro zone debt provided support for
the dollar, while forecasts indicated U.S. crude stockpiles
rose for a fifth time in six weeks.
U.S. crude for December <CLc1> fell 20 cents to $86.86 a
barrel at 0316 GMT, after reaching $87.49 on Monday, the
highest since October, 2008.
ICE Brent <LCOc1> dipped 13 cents to $88.33.
German September industrial output unexpectedly fell,
adding to euro woes related to a political impasse ahead of a
key Irish budget vote. The dollar strengthened by about 0.1
percent against a basket of currencies on Tuesday. <.DXY>
"It's just a general return to risk aversion that is
driving the markets today," said Michelle Kwek, an analyst at
Informa Global Markets in Singapore.
"Oil has the dollar factor inside, and when the dollar
rebounds, prices should come down. If the global economy is
slowing, that should dictate prices lower."
The Organization of the Petroleum Exporting Countries sees
no need to boost its output when it meets next month, two
officials from the group said on Monday, even though oil prices
have rallied to a two-year high above $87 a barrel.
[]
"I don't see any need to raise output," said Shokri Ghanem,
chairman of Libya's National Oil Corporation, referring to
OPEC's Dec. 11 meeting in Quito, Ecuador. []
"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," he said.
Saudi Arabia's oil minister, Ali al-Naimi, last week said
oil at $70 to $90 was comfortable for consumers. That was
higher than the $70 to $80 range the top exporter had
previously called ideal, and prices rose after his remarks.
U.S. crude inventories probably increased by 1.4 million
barrels in the week to Nov. 5, a Reuters poll of analysts
showed on Monday. []
But a drawdown of 1.8 million barrels was forecast on
average for distillate fuel, which includes include heating oil
and diesel, down for the seventh consecutive week, while
gasoline supplies fell 1 million barrels, lengthening drawdowns
to the third week in a row, according to the survey.
"The drop in fuels should be looked at more closely than
the increase in crude because now we are approaching winter,
and that should lift demand," Kwek said.
Industry group, the American Petroleum Institute, will
issue its report on Tuesday at 2130 GMT, followed by the U.S.
Energy Information Administration's government data on
Wednesday.
Gold added to a record breaking run, hitting a new high
above $1,400 an ounce as investors sought safe havens in the
face of a number of uncertainties, including the euro-area debt
concerns and this week's G20 leaders' summit. []
(Editing by Ed Lane)
