* China Premier Wen prepares steps to tame price rises
* Euro zone ministers-IMF agree on mission to Ireland
* Coming Up: EIA U.S. inventory report; 1530 GMT
(Adds details, updates prices)
By Alejandro Barbajosa
SINGAPORE, Nov 17 (Reuters) - Oil hovered near
early-November lows on Wednesday as speculation mounted that
China will step up efforts to cool its economy, while a sharp
drop in U.S. crude inventories prevented prices from sliding
further.
U.S. crude for December <CLc1> advanced 6 cents to $82.40
a barrel at 0335 GMT, after touching $82.03 on Tuesday, the
lowest price since Nov. 1, when the front-month contract last
traded below $82. Prices have tumbled 7 percent from a
25-month high of $88.63 in just four sessions.
ICE Brent crude <LCOc1> rose 1 cent to $84.74.
Chinese Premier Wen Jiabao said his government is
preparing steps to tame price rises, adding his voice to
official efforts to reassure consumers irked by a rapid rise
in the price of food and raising concern about potential
monetary tightening measures. []
An interest rate increase in China would curb oil
consumption by the world's largest energy user, the main
driver for resurging demand in the aftermath of the recession.
Risk aversion because of Ireland's debt crisis is also
prompting investors to reverse bullish bets across commodities.
"World growth has been put under question and markets are
nervous," said David Taylor, an analyst at CMC Markets in
Sydney, adding that declines in U.S. crude inventories "may be
stopping the price from sliding even further".
"The market hasn't found support yet. It's the demand side
and questions about the U.S. dollar and China's capacity to
consume energy going forward. In addition, we have the latest
story of the European sovereign debt crisis with Ireland.
These aren't small issues."
The dollar edged down 0.1 percent against a basket
of currencies on Wednesday.
Euro zone ministers have agreed to send a joint
European-International Monetary Fund mission to Ireland that
could prepare the way for a bailout to prevent its debt crisis
spreading to other countries. []
Asian stocks fell and the euro wallowed at seven-week lows
against the dollar on Wednesday as Ireland's festering debt
crisis led investors to play it safe and take profits.
The recent rise in the U.S. dollar and speculation that
China could tighten monetary policy yet again to temper price
pressures threatened to send commodities into another
sell-off.
But U.S. oil inventories provided a ray of hope for oil
markets, with the American Petroleum Institute reporting late
on Tuesday that the nation's crude inventories tumbled by more
than 7 million barrels for the second week in a row.
The industry report showed crude stockpiles declined by
7.7 million barrels in the week to Nov. 12, compared with
analyst expectations for a 100,000-barrel build.
Distillate stocks rose by 222,000 barrels, the API said,
compared with analyst expectations for a 2.2-million-barrel
drop, while gasoline inventories fell 1.7 million barrels,
much more than analyst expectations for an 800,000-barrel fall.
Government statistics on inventories will follow from the
U.S. Energy Information Administration (EIA) on Wednesday at
1530 GMT.
(Editing by Himani Sarkar)
