* Eurozone debt contagion fears persist despite Irish rescue
* Volume light, U.S. markets close for federal holiday
(Adds quotes, updates prices)
By Zaida Espana
LONDON, Nov 25 (Reuters) - Oil inched up on Thursday,
reversing initial losses in thin, volatile trading due to the
U.S. Thanksgiving holiday.
Prices added to gains of more than 3 percent triggered by
positive U.S. economic data during Wednesday's session, while in
Europe the focus remained on the strength of other peripheral
euro zone members after debt Ireland's bailout.
U.S. crude for January <CLc1> was up 36 cents at $84.22 a
barrel by 1132 GMT, up from earlier lows of $83.45.
ICE Brent <LCOc1> rose 41 cents to $86.25.
Volume was just over 20,700 lots by the same time, compared
to an average daily trading of around 315,000 lots over the past
year, according to Reuters calculations.
Prices are set to remain volatile in light volume as the New
York Mercantile Exchange (NYMEX) combines trades for Nov. 25 and
Nov. 26 into one single trading session because of Thursday's
Thanksgiving holiday. []
"Oil prices will fluctuate today, but in the end we likely
end near the previous close, changes throughout the trading
session may prove to be more erratic due to lower liquidity as
result of U.S. markets being closed for Thanksgiving," BNP
Paribas' head of commodity markets' strategy Harry
Tchilinguirian said.
Tchilinguirian expects that euro zone debt developments
together with China's inflation prospects will be the main
challenges to risk-appetite, which has been the driver behind
the recent oil price increase.
Currently, analysts at Commerzbank and Petromatrix see price
support at around $80 a barrel.
"The risks for the market, including Ireland and (the threat
of conflict in) Korea are still there, and yesterday's DOE
report was also quite bearish, so I can't find any convincing
reason why oil prices climbed to $84," Commerzbank oil analyst
Carsten Fritsch said, although he sees support at $80 a barrel.
"Technically, the action of the last two days definitely
print out a very strong defense of 80.50 $/bbl as a support,"
Petromatrix' Olivier Jakob said in a note.
EURO ZONE WOES PROVIDE BACKGROUND
Ireland unveiled a 15 billion euro belt-tightening plan, but
failed to quell fears other euro zone members will run into debt
difficulties.
Debt worries kept the euro close to a two-month low, while
the dollar index <=USD>, a measure of its performance against
six other major currencies, inched down by 1131 GMT.
Oil tumbled to 2010 lows under $65 in May as the Greek debt
crisis dampened confidence about the global economic recovery,
and rebounded to a two-year high of $88.63 on Nov. 11.
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For an interactive timeline of the euro zone debt crisis
http://link.reuters.com/kar27p
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Earlier this week, prices dropped to near $80 after North
Korea's deadly artillery barrage against a South Korean island
that boosted the value of the dollar and reduced the appetite
for riskier commodity assets.
U.S. DATA SUPPORTS
Initial jobless benefits claims in the U.S. fell to their
lowest level in more than two years last week while consumer
spending rose for a fourth straight month in October, reports
showed on Wednesday, fuelling hopes the economic recovery is
strengthening. []
U.S. crude oil stockpiles rose 1.03 million barrels in the
week to Nov. 19 as crude imports jumped by more than a million
barrels per day, the U.S. Energy Information Administration
said on Wednesday. []
Gasoline stocks rose 1.91 million barrels, the EIA said,
against expectations for a 600,000-barrel draw, and distillate
stocks fell 541,000 barrels, much less than analysts'
expectations for a larger 1.2 million-barrel draw.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Keiron Henderson)
