* Dollar strength, battered euro pressure oil prices
* Coming up: CFTC commitments report delayed to Monday
(Recasts, updates prices and market activity, new byline and
changes dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Nov 26 (Reuters) - U.S. oil prices slipped in
light post-holiday trading on Friday as Europe's debt crisis
pushed the euro to a two-month low against the dollar and
investors eyed tensions between North Korea and South Korea.
The dollar index <.DXY> pared gains, helping oil bounce off
lows along with geopolitical concerns including the Korea
situation and top oil exporter Saudi Arabia's announcement of
149 arrests linked to al Qaeda over the past eight months.
"There is some feeling the dollar index may have maxed out
for the day and the geopolitical tensions, Korea and the Saudi
arrests could be limiting losses, but are being trumped so far
by the euro zone problems," said Robert Yawger, senior vice
president, energy futures, at MF Global in New York.
U.S. gasoline futures, which managed a short-lived gain
intraday as next Tuesday's December refined products contract
expirations approached, also helped pull crude futures off
lows.
U.S. crude oil for January delivery <CLc1> fell 47 cents to
$83.39 a barrel by 11:45 a.m. EST (1645 GMT), well above an
earlier $82.78 low. Front-month crude remained on track to post
a gain for the week, after two consecutive weekly losses.
The front-month crude price has not dropped below $80 since
Oct. 20 and has seesawed after reaching a 25-month peak at
$88.63 on Nov. 11.
U.S. crude trading volume totaled about 183,500 lots, with
roughly two hours left of a shortened session. That was well
below the 465,481 lots traded on the 2009 post-Thanksgiving
Friday and about 70 percent below the 30-day average.
In London, ICE January Brent crude <LCOc1> fell 81 cents to
$85.29 a barrel.
The dollar index <.DXY> hit a two-month high and the euro
<EUR=> fell to a two-month low against the greenback as euro
zone debt worries intensified. []
European officials denied reports on Friday that Portugal
faced pressure to seek a bailout and Spain ruled out needing
help to manage its finances. []
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For a graphic of euro zone struggles with debt, click:
http://r.reuters.com/hyb65p
For a graphic comparing euro zone peripheral economies:
http://r.reuters.com/zem66q
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A stronger dollar typically pressures oil prices as it
makes dollar-denominated crude more expensive for holders of
other currencies.
The Korean peninsula remained tense as China warned against
military acts near its coast ahead of U.S.-South Korean naval
exercises that North Korea, days after shelling a South Korean
island, said risked pushing the region to war. []
Chinese Foreign Minister Yang Jiechi said his country was
determined to prevent a repetition of this week's violence on
the Korean peninsula after meeting North Korea's ambassador to
Beijing. []
Yang also spoke by phone to his U.S. and South Korean
counterparts.
While China wrestled with geopolitical tension, oil
investors worried whether the world's No. 2 oil-consuming
country would take more action to cool inflation and its
economy after its recent moves to raise banks' reserves.
On Thursday, the country's top economic planning body, the
National Development and Reform Commission, said a crackdown on
commodity prices had contributed to a widespread fall in
futures in the last two weeks. []
China's commodities exchanges have announced measures to
raise margin requirements to curb speculation. []
Meanwhile, with elderly King Abdullah in the United States
recovering from surgery, Saudi Arabia said it had captured al
Qaeda militants in recent months who were raising money and
recruiting members to carry out attacks. []
(Additional reporting by Christopher Johnson in London and
Florence Tan in Singapore; Editing by Dale Hudson)
