* 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
(Updates with accelerating price drop)
By Alejandro Barbajosa
SINGAPORE, Nov 17 (Reuters) - Oil dropped as much as 1.3
percent on Wednesday to the lowest price in November, as
speculation mounted that China will step up efforts to cool
its economy, while Irish debt jitters accelerated the fall.
U.S. crude for December <CLc1> tumbled $1.10 to $81.24 a
barrel at 0805 GMT, shedding more than 8 percent from last
week's 25-month high of $88.63 in just four sessions. ICE
Brent crude <LCOc1> fell $1.11 to $83.62.
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."
IRISH DEBT CONCERNS
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. []
Investors gave stocks a wide berth on Wednesday on renewed
worries China may hike interest rates this week and after top
level meetings in Europe failed to produce a clear solution to
tackle Ireland's debt crisis.
The tendency of China's central bank to raise interest
rates around the 20th day of the month makes this Friday a
"sensitive window" for a rate rise, an official newspaper said
on Wednesday, citing unnamed analysts. []
The report in the China Securities Journal did not cite
any officials and was based on a potentially flawed reading of
the central bank's decision-making history.
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.
"There is evidence that the economic story in the U.S.
isn't as bad as previously thought, and might influence
stocks," Taylor said.
U.S. gasoline inventories fell 1.7 million barrels, the
API said, much more than analyst expectations for an
800,000-barrel decline, while distillate stocks rose by
222,000 barrels, compared with analyst expectations for a
2.2-million-barrel drop.
Government statistics on inventories will follow from the
U.S. Energy Information Administration on Wednesday at 1530 GMT.
U.S. retail gasoline demand rose 2.4 percent last week
from the previous one, with the Midwest and Central Atlantic
showing the largest growth, MasterCard Advisors' SpendingPulse
report showed on Tuesday. []
Average gasoline demand rose 216,000 barrels per day (bpd)
to 9.202 million bpd in the week to Nov. 12. However, demand
was down 0.2 percent from the same week last year.
(Editing by Michael Urquhart)
