* China Premier Wen prepares steps to tame price rises
* Dollar slips after weak US CPI data
* Coming Up: EIA U.S. inventory report; 1530 GMT
(Updates prices, U.S. consumer index)
By Ikuko Kurahone
LONDON, Nov 17 (Reuters) - Oil fell below $82 a barrel,
along with falls in broader markets on Wednesday, due to renewed
worries China might raise interest rates to fight inflation.
Chinese Premier Wen Jiabao said his government was preparing
steps to tame price rises, the official Xinhua news agency
reported late on Tuesday. []
U.S. crude futures <CLc1> briefly fell more than $1 to
$81.18 a barrel, the lowest intraday-price since Oct. 29, and
were trading 56 cents lower at $81.78 by 1405 GMT.
ICE Brent crude <LCOc1> was trading 30 cents lower at
$84.43, having touched as low as $83.57.
It was a fourth day of declines in U.S. crude, which
totalled a loss of more than 7 percent since it struck a
two-year high of $88.63 on Thursday.
"While the market seems in a bit of turmoil at the moment,
the fundamentals have not changed overnight. Although crude will
likely look to exogenous factors over the short term, we expect
fundamentals to take a more important role going forward, "Leon
Westgate with Standard Bank said.
The tendency of China's central bank to raise interest rates
around the 20th day of the month makes this coming Friday a
"sensitive window" for a rate rise, an official newspaper said
on Wednesday, citing unnamed analysts. []
China has overtaken the United States to become the world's
largest energy consumer. Any slowdown to the Chinese economy may
slow its rapid growth in energy demand.
But some market participants said Chinese demand should
still support oil and commodity prices in the long term.
"Anything that acts as a gentle brake on the runaway growth
in China will be a very good thing in the longer term," said
Christopher Bellew with Bache Commodities.
"And if it causes commodity prices to fall, it will only be
in the short term."
Bellew added that a strong dollar was also weighing on oil
prices in the short term.
U.S. DATA
Oil prices briefly turned positive ahead of the release of
U.S. weekly oil figures and as the dollar slipped following a
weak reading of the U.S. Consumer Price Index from the Labor
Department. []
Analysts in the Reuters poll forecast the data would show a
100,000 barrel increase in the U.S. crude oil stocks in the week
to Nov. 12. []
Late on Tuesday, a separate set of data from industry group
American Petroleum Institute showed crude oil inventories
declined by 7.7 million barrels in the week. Investors were
holding off ahead of the EIA numbers to see whether the big and
unexpected fall is confirmed.
The U.S. consumer index increased by a smaller-than-expected
0.2 percent in October. The increase in the year-on-year core
rate was the smallest on record, data showed on Wednesday,
further supporting the Federal Reserve's decision to ease
monetary policy. []
A weaker dollar makes dollar-denominated oil and commodities
prices cheaper for consumers outside the United States.
Earlier in the day, the dollar held near seven-week highs
against the euro amid Ireland's debt woes.
Ireland committed itself on Wednesday to working with a
European Union-IMF mission on urgent steps to help its stricken
banking sector, a process that could lead to a bailout despite
Dublin's deep reluctance.
A team from the European Commission, the International
Monetary Fund and European Central Bank will travel to Ireland
on Thursday to examine what measures may be needed if Dublin
decides to seek aid, euro zone finance ministers said.
[]
(Reporting by Alejandro Barbajosa in Singapore, Ikuko Kurahone
and Dmitry Zhdannikov in London; editing by Jane Baird)
