* Ireland agrees to tackle debt crisis with EU-IMF
* U.S. gasoline up 3 pct on drawdown, leads rally
* China interest rate speculation eases
* Coming Up: U.S. CFTC trader position report, Friday
(Updates with settlement prices and market activity)
By Gene Ramos
NEW YORK, Nov 18 (Reuters) - Oil prices closed nearly 2
percent higher on Thursday after four days of losses as worries
over Ireland's debt crisis eased, pushing the dollar lower and
whetting appetites for risk in stocks and other commodities.
Gasoline led the rally, gaining more than 3 percent after
an unexpectedly large 2.66 million-barrel drop in gasoline
stocks reported on Wednesday stoked concerns about tight
conditions in the New York Harbor where cash differentials
hovered near their highest level in two years. []
U.S. crude for December delivery <CLZ0> settled $1.41, or
1.75 percent, higher at $81.85 a barrel.
Prices also got a boost from a second look at a 7.3
million-barrel drawdown in crude stocks in government data
reported on Wednesday, the biggest weekly fall in 14 months.
U.S. December gasoline <RBc1> jumped 7.04 cents, or 3.26
percent, to settle at $2.2283 a gallon.
The front-month gasoline crack spread <RB-CL=R>, the
refiners' margin after crude is processed into fuel, ended at
$11.74 a barrel, the highest since June 22 when the spread
closed at $12.40.
ICE January Brent <LCOc1> ended up $1.77, or 2.13 percent,
at $85.05.
Before the day's rebound, concerns about the euro zone's
fiscal health -- which had fueled a rebound in the dollar and
fears of tighter Chinese monetary policy -- had knocked about 8
percent off a 25-month high hit last week, sending oil to
$80.06 on Wednesday, its weakest price since Oct. 20.
"Buying was also supported by crude's ability to hold above
$80 yesterday," said Rich Ilczysyn, senior market strategist at
Lind-Waldock in Chicago.
DOLLAR DIPS, U.S. DATA UPBEAT
The dollar <.DXY> slid about 0.6 percent against a basket
of currencies after Ireland's central bank chief said on
Thursday he expected the country to take tens of billions of
euros in loans from European partners and the IMF to tackle its
debt woes. []
"For now the market seems to be increasingly relaxed that
measures are being put in place (in Ireland)," said Jim Reid, a
strategist at Deutsche Bank.
Energy futures drew additional support from economic data
showing manufacturing activity in the U.S. mid-Atlantic region
touched a one-year high this month and that new U.S. claims for
jobless benefits barely rose last week. []
Though the data adds to an improving economic picture after
a summer slowdown, it is unlikely to deter the Federal Reserve
from completing a plan to buy $600 billion of U.S. Treasury
bonds to further stimulate growth. []
The bounce from oil's four-week low was tempered by doubts
over the state of other euro zone countries' finances.
"Even should Ireland be rescued, so to speak, the market
might shift its focus again to Greece and Portugal," said Eugen
Weinberg, an analyst at Commerzbank.
Concerns about the impact of an anticipated tightening of
Chinese fiscal policy continued to weigh on the market,
although an academic advisor to the People's Bank of China said
China should not rely solely on higher interest rates to curb
inflation, seeking to quell speculation about a rate hike.
(Additional reporting by Robert Gibbons in New York; Isabel
Coles in London; Alejandro Barbajosa in Singapore; editing by
Jim Marshall)
