* Market's attention focuses on Friday's U.S. payroll report
* Technicals signal oil to retreat towards $88
[]
* Coming Up: Initial U.S. jobless claims; 1330 GMT
SINGAPORE, Jan 5 (Reuters) - Oil held above $90 on
Thursday as upbeat private U.S. payroll data helped markets
recover from a mid-week slump on expectations for a sustained
economic recovery at the world's top crude consuming nation.
U.S. crude for February <CLc1> added 9 cents to $90.39 a
barrel at 0211 GMT after earlier trading as high as $90.71.
Prices touched a 27-month high of $92.58 in the first
trading day of the year and tumbled to as low as $88.10 on
Wednesday, before rebounding with the payroll data.
"It's general optimism about the commodity market because
of pretty good data coming out of the United States," said
Mark Pervan, a senior commodities analyst at ANZ in Melbourne.
"There's some volatility related to the strength of the
dollar, but the market is certainly getting positive for
demand."
Traders were looking for monthly U.S. government data on
Friday to confirm the increase in payrolls reported by
processing company ADP Employer Services on Wednesday.
Private employers added 297,000 jobs last month, ADP said,
the largest gain on ADP records dating to 2000. U.S. nonfarm
payrolls probably increased by 140,000 in December, a Reuters
survey showed. []
Friday's non-farm payrolls report "will finish it off,"
Pervan said. "The likelihood is that we will see a pretty good
number."
Oil fell early on Wednesday after suffering the biggest
single-day drop since mid-November a day earlier as the dollar
strengthened. An appreciation of the greenback typically
weighs on commodities as they become more expensive for buyers
using other currencies.
But a larger-than-expected drop in U.S. crude inventories
last week also bolstered prices. Inventories fell by 4.16
million barrels in the final week of 2010, according to a
weekly report from the Energy Information Administration on
Wednesday.
Over the past five weeks, U.S. crude inventories have
fallen by more than 24 million barrels, their biggest
five-week decline since mid-2008, reducing a surplus that has
prevailed for the past two years. Oil companies traditionally
reduce U.S. crude inventories at the end of the year for tax
purposes.
Still, gasoline stockpiles rose about 11 times as much as
expected, adding 3.29 million barrels, while distillate stocks
also climbed by a larger-than-expected 1.15 million barrels,
according to the EIA.
Crude inventories at the key Cushing, Oklahoma hub rose
858,000 barrels to 37.49 million barrels, helping depress the
value of U.S. benchmark West Texas Intermediate (WTI) relative
to European marker Brent.
Front-month ICE Brent futures traded at a premium bigger
than $5 a barrel to the equivalent WTI contract.
A chemical plant fire at the Dutch Moerdijk industrial
zone which affected shipping traffic in Europe's busy
Rotterdam-Antwerp ports also boosted Brent relative to U.S.
crude. The fire did not impact Royal Dutch Shell's oil
refinery there. []
In other markets, Japan's Nikkei average rose to its
highest level in nearly eight months on Thursday after the
dollar jumped against the yen following the surprisingly
strong U.S. jobs data.
The payroll figures also ignited a broad commodities
rebound on Wednesday, a day after prices fell their most in
seven weeks.
Analysts said optimism that the U.S. economy was
recovering more quickly than thought boosted the demand
outlook for commodities, which finished 2010 as the top asset
class.
(Reporting by Alejandro Barbajosa; Editing by Ed Lane)
