* Oil may drop to $80.60/bbl -technicals []
* Bernanke defends Fed's bond-buying programme
* Coming up: NYMEX Dec crude contract expires on Friday
(Adds technicals, updates prices)
By Osamu Tsukimori
TOKYO, Nov 19 (Reuters) - Oil erased early gains to below
$82 a barrel on Friday, as Asian stocks pared gains and
technicals indicated weakness ahead of the weekend, after
sharp rises on an improved outlook for Ireland's debt crisis.
U.S. crude for December delivery <CLc1>, which expires
after Friday's settlement, was trading down 41 cents at $81.44
a barrel by 0509 GMT, after rising as high as $82.50 earlier.
Oil, which settled up $1.75 on Thursday, still remains
well below a 25-month high of $88.63 hit on Nov. 11, but
recovered after hitting a four-week low of $80.06 on Wednesday
amid concerns about the euro zone's fiscal health.
Oil could drop back to $80.06 per barrel as its rebound
could have fizzled, Wang Tao, Reuters technical analyst, said
on Friday.
London Brent crude <LCOc1> was trading 44 cents lower at
$84.61 a barrel.
"Precious metals such as silver and palladium are climbing
and so are stocks, boosting market sentiment," said Shuji
Sugata, a manager at Mitsubishi Corp Futures. "There are
slight signs of risk-taking, but new position taking is
difficult because volatility is high at the end of the week."
Prices received support earlier from a 7.3 million-barrel
drawdown in crude stocks in government data reported on
Wednesday, the biggest weekly fall in 14 months.
The euro held on to its recent gains on Friday on budding
hopes that Ireland is near a deal to shore up its banks and
budget deficit, although the currency stopped short of
breaking above major resistance.
Ireland's central bank chief said he expected the country
to receive tens of billions of euros in loans from European
partners and the IMF to help shore up its troubled banks and
stabilise the economy. []
Federal Reserve Chairman Ben Bernanke defended the U.S.
central bank's controversial bond-buying programme on Thursday
against criticism that it is debasing the dollar, saying a
vigorous U.S. recovery is central to global economic health.
[]
No major economic indicators are due on Friday.
BNP Paribas raised its 2011 forecast for the average U.S.
crude oil price to $88 a barrel on Thursday, up $2 from its
previous view, it said in a research note. []
Japan's Nikkei average pared gains after climbing
to a fresh five-month high above 10,000, which was propelled
by hedge fund inflows from overseas and additional support
from a fall in the yen.
(Reporting by Osamu Tsukimori; Editing by Manash Goswami)
