* Oil retreats from 8-week intraday high above $83
* OPEC officials say prices within their desired range
* Coming up: IEA monthly oil market report due Friday
(Recasts, updates prices, market activity; new dateline,
previously LONDON)
NEW YORK, March 11 (Reuters) - Oil slipped below $82 a
barrel on Thursday, retreating from an eight-week high hit the
previous session, as a spike in Chinese inflation fed concern
that potential monetary tightening could dent energy demand in
the world's second largest oil consumer.
Consumer inflation has soared to a 16-month high in China,
and a raft of economic data showed broad-based strength,
providing fresh arguments for policy tightening in a bid to
stop the economy overheating.
"Crude prices are struggling on concerns about the coming
moves by China to manage its economic output. The inflation
reading there appears to be above their comfort level, and
moves to tame the economy will likely impact energy demand,"
said John Kilduff, partner at Round Earth Capital in New York.
U.S. crude for April <CLc1> fell 22 cents to $81.87 a
barrel by 12:17 p.m. (1717 GMT), after touching $83.03 on
Wednesday, the highest level since oil's 15-month high of
$83.95 on Jan. 11.
London ICE April Brent <LCOc1> fell 33 cents to $80.15 a
barrel.
China's booming economy has seen oil imports soar, hitting
their second highest ever monthly level in February
[]. On Wednesday, OPEC said Chinese daily oil
demand has jumped by almost 2 million barrels in just five
years to stand around 8.6 million barrels per day.
The U.S. trade deficit narrowed unexpectedly in January as
oil imports fell to their lowest since February 1999, a
government report showed, which helped pressure crude prices.
U.S. exports fell, but not as much as the oil-led drop in
imports. []
"The U.S. trade deficit being lower than expected this
morning speaks of a US consumer that continues to struggle,"
said Kilduff.
A smaller than expected drop in the number of U.S. workers
filing new applications for unemployment benefits also weighed
on sentiment, but falling gasoline inventories in the United
States and the first signs of a recovery in demand in 18 months
supported prices. [] []
The dollar <.DXY> was near unchanged against the euro in
volatile trade on Thursday. The dollar is up almost 8 percent
since the end of November.
A stronger dollar boosts the purchasing power of oil
exporters, including OPEC members. A weaker greenback usually
supports oil prices as it makes dollar-denominated commodities
less expensive for holders of other currencies. []
The Organization of the Petroleum Exporting Countries
(OPEC), which pumps at least one in every three barrels of oil,
meets in Vienna on March 17 to discuss production policy.
Officials have said they do not expect a change in targets
while prices are within their desired range. []
"You are going to see $75 to $85 until OPEC changes their
views," said Peter McGuire, managing director of Commodity
Warrants Australia in Sydney. "Given that the U.S. dollar is
appreciating, they are relatively content with what they are
receiving for their oil."
OPEC has restricted output since the onset of the financial
crisis in a bid to support prices. But the group's compliance
with its officially targeted cut of 4.2 million barrels per day
(bpd) has slipped to just 53 percent as prices have risen.
Output from the organisation is bloating U.S. crude
inventories. They have climbed for the past six weeks, showing
a 1.4-million-barrel gain to 343 million barrels in the week to
March 5, the Energy Information Administration (EIA) said on
Wednesday. []
The nation's gasoline stockpiles showed a surprise decrease
of 2.9 million barrels, the EIA said, while distillate stocks
including heating oil and diesel fell by 2.2 million barrels.
U.S. total oil product demand over the past four weeks was
19.41 million bpd, up 3.8 percent from a year ago, showing the
first consistent recovery in demand for 18 months.
(Reporting by David Sheppard in London, Edward McAllister,
Robert Gibbons and Gene Ramos in New York, Alejandro Barbajosa
in Singapore; Editing by David Gregorio)
