* U.S. crude inventories unexpectedly fell last week -API
* Crude's target higher than $87 -technicals []
* Coming Up: U.S. EIA petroleum inventories; 1430 GMT
* U.S. FOMC to make statement at 1815 GMT
(Updates with prices, quotes, previous SINGAPORE)
By Zaida Espana
LONDON, Nov 3 (Reuters) - Oil climbed to a six-month high
above $84 for a second straight session on Wednesday after U.S.
fuel inventories fell, and ahead of the widely anticipated U.S.
Federal Reserve's quantitative easing announcement due later.
By 1000 GMT, U.S. crude for December <CLc1> rose 57 cents to
$84.47, after touching $84.50 earlier on Wednesday, the highest
intraday price since May 4.
ICE Brent <LCOc1> rose 55 cents to $85.96.
Expectations the Federal Reserve will announce a fresh round
of monetary stimulus at 1815 GMT kept the dollar under pressure,
helping commodity prices, while world stocks rose to fresh
two-year highs. []
Some analysts expect the Fed's announcement of further
treasury bond purchases, also known as quantitative easing, to
have a limited impact on markets that have already largely
priced it in.
"From a risk point of view, the risks are rather skewered to
disappointment, and could limit the upside in oil prices today,"
Commerzbank oil analyst Carsten Fritsch said.
"The odds are that prices will ease after the Fed
announcement unless there is a big purchasing plan unveiled, as
the bar is quite high for expectations in the market."
BNP Paribas head of commodity markets strategy Harry
Tchilinguirian said: "We also remain circumspect as to how much
more price mileage oil will get from the announcement of a
second round of quantitative easing in the short term."
If already discounted, the recent rally in oil prices might
prove to be a case of "buy the rumour, sell the fact," he added.
INVENTORIES
Price support came from American Petroleum Institute (API)
data on Tuesday showing a fall in U.S. crude inventories of 4.1
million barrels last week, compared with expectations for a 1.2
million barrel build. []
"Overall, it's a bullish set of data, and sets a bullish
outlook for the EIA," said Serene Lim, a Singapore-based oil
analyst at ANZ.
"It could be the beginning of the seasonal downward trend as
we enter the winter season in the Northern Hemisphere."
But Commerzbank's Fritsch was more cautious: "This is seen
by some market participants as an indication that high stock
levels in the U.S. are beginning to recede, but I'm rather
cautious this is going to happen."
"In terms of crude inventories decline, this is a counter
movement after last week's more aggressive inventory build,
while imports are up and refinery maintenance down, so the
declines are not supported by other fundamentals," he said.
The Energy Information Administration (EIA) will publish
official statistics later on Wednesday.
Oil prices at $100 a barrel would be more comfortable for
producing nations because of higher food prices and a weaker
dollar, the top oil official for OPEC member Libya said on
Tuesday. []
The Libyan comments came a day after Saudi Arabian Oil
Minister Ali al-Naimi said oil in a $70-$90 range was
comfortable for consumers, signalling a higher acceptable range
from the $70-$80 range previously deemed comfortable.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
