* Libya says oil could get closer to $100 by end of 2010
* Caution before U.S. Federal Reserve decision on Wednesday
* Oil pipeline blown up in southern Yemen - local official
* Coming up: API oil inventory data, 2030 GMT
(Updates prices, adds comment, detail)
By Christopher Johnson
LONDON, Nov 2 (Reuters) - Oil jumped more than $1 per barrel
on Tuesday after OPEC member Libya said oil producers would find
prices of $100 a barrel more comfortable because of higher food
prices and a weaker dollar.
Benchmark U.S. crude for December <CLc1> rose to a high of
$84.14, up $1.19, before slipping back to trade at around $83.94
by 1331 GMT, adding to gains of nearly 2 percent on Monday.
ICE Brent <LCOc1> climbed 82 cents to $85.44.
Shokri Ghanem, chairman of Libya's National Oil Corp, told
Reuters he thought oil prices would get closer to $100 by the
end of the year. []
Ghanem, the top oil official for Libya, said the dollar had
fallen and prices of the other commodities had risen.
"I think that we can get closer to $100. There is a sort of
tacit compensation for the increase in the prices of the other
commodities. The price is inching up and I think it will be
closer to $100," Ghanem said.
The Libyan official's comments came a day after top oil
exporter Saudi Arabia shifted upwards from a price range of
$70-$80 it has backed for around two years, saying oil at
between $70 and $90 a barrel was comfortable for consumers.
[]
Michael Guido, director of hedge fund sales at Macquarie
Bank in New York, said he thought the price spike was triggered
by the Libyan comments.
"I think the spike was off Libya. However, there is a new
bullish spin today among the funds in regards to where the
barrel really belongs when looking at the dollar and other
commodity markets," Guido said.
"Perhaps the market should be resting up at $80 to $90 as
opposed to $70 to $80. Eighty dollars is the new $70 when
looking at summer support levels."
QE2
The Libyan comments came ahead of an expected decision by
the Federal Reserve on Wednesday to pump more money into the
U.S. economy in what economists expect will be a second round of
"quantitative easing", also known as QE2.
The U.S. central bank is widely expected to decide to buy
around $500 billion in longer-term Treasuries over about six
months in a move that could encourage more dollar weakness.
The dollar fell against a basket of currencies on Tuesday
<.DXY>, adding extra support to oil and commodities. A fall in
the dollar makes dollar-denominated commodities cheaper. []
Traders and analysts were wary ahead of the Fed's move,
expected at the end of a two-day meeting starting on Tuesday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of returns from a range of assets since the
Fed began hinting it would launch a new round of QE, click:
http://link.reuters.com/kyw48p
For a graphic of commodities so far this year, click:
http://link.reuters.com/kew48n
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For much of this year, crude oil prices have been stuck
between $70 and $80 per barrel, a range that OPEC has said for
the past two years it has seen as ideal for both producers and
consumers.
But on Monday Saudi Arabia appeared to raise this range.
Naimi's comments were understood to signal the world's top
oil exporter could allow prices to climb as high as $90.
Adding to the nervous mood for oil markets were reports of
an explosion at an oil pipeline in Yemen, which local officials
blamed on suspected militants.
A Yemeni official said the damaged pipeline in the province
of Shabwa was operated by a South Korean firm but declined to
give further details. It was not immediately clear whether
exports from the small oil producer would be affected.
[]
Yemen is a small oil producer with output of around 300,000
barrels per day, according to U.S. official estimates.
Industry group the American Petroleum Institute will issue
its latest U.S. crude oil inventory data later on Tuesday.
Analysts expect stockpiles in the world's largest energy
consumer to have risen for the fourth time in five weeks last
week as imports increased. []
(Editing by Jane Baird)
