Oil pares gain on skepticism about Ireland rescue

                                
 * South Korea, U.S. start military drill; China calls for 
talks
                                
 * Coming Up: Eurozone Economic sentiment Nov; 1000 GMT

                                
 By Alejandro Barbajosa	
                                
 SINGAPORE, Nov 29 (Reuters) - Oil pared early gains on 
Monday as the dollar strengthened on skepticism that a 
European Union rescue for Ireland would halt contagion to 
other euro zone economies.	
                                
 The EU over the weekend approved Ireland's bailout and 
outlined a permanent system to resolve the block's debt 
crisis. That instilled some confidence that energy demand 
growth would remain resilient next year as markets opened.	
                                
 U.S. crude for January <CLc1> rose as much as 44 cents to 
$84.20 a barrel, approaching Friday's 10-day intraday high 
just above $84.50, and was up 35 cents at $84.11 at 0209 GMT. 
Prices reached a two-year high of $88.63 on Nov. 11.	
                                
 Finance ministers from the 16-nation euro zone, anxious to 
prevent market contagion engulfing Portugal and Spain, 
unanimously endorsed an emergency loan package of 85 billion 
euros ($115 billion) to help Dublin cover bad bank debts and 
bridge a huge budget deficit. [ID:nLDE6AR03X]	
                                
 "It was just a relief rally, but there are still so many 
structural problems that people are already targeting other 
dominoes like Portugal and Spain," said Michelle Kwek, an 
analyst at Informa Global Markets in Singapore.	
                                
 "Markets are not believing measures will be enough to 
contain the crisis, and that also combines with the tensions 
in Korea. You wouldn't want to be punting on anything."	
                                
 South Korean President Lee Myung-bak on Monday labelled 
North Korea's artillery attack on a southern island a crime 
against humanity and said Pyongyang will pay the price for any 
further provocation. [ID:nTOE6AR029]	
                                
 China on Sunday called for emergency talks to resolve the 
crisis, and Seoul and Tokyo said they would study the 
proposal, as the U.S. and South Korean militaries started a 
massive drill.	
                                
 In other geopolitical news, Saudi Arabia's King Abdullah 
has repeatedly urged the United States to attack Iran's 
nuclear program and China directed cyberattacks on the U.S., 
according to a vast cache of U.S. diplomatic cables released 
on Sunday in an embarrassing leak that undermines U.S. 
diplomacy. [ID:nN28175961]	
                                
 King Abdullah, who is being treated in New York for a 
blood clot which complicated a slipped disc, has started 
rehabilitation and his health is "very reassuring", the 
kingdom's health minister said on Sunday. [ID:nLDE6AR0G2]	
                                
 The dollar strengthened by about 0.15 percent on Monday 
against a basket of currencies, capping oil's gains as risk 
aversion grew, Kwek said. ICE Brent for January <LCOc1> rose 
29 cents to $85.87.	
                                
 The embattled euro crept off two-month lows earlier on 
Monday after European authorities tried to protect the 
region's financial stability with Ireland's rescue package.	
                                
 Enbridge Inc's 670,000 barrels a day Line 6A oil 
pipeline in the U.S. Midwest was expected to run at reduced 
rates until this week, creating another costly bottleneck for 
Canadian crude exports, the company said on Friday. 
[ID:nN26122553]	
	
 (Reporting by Alejandro Barbajosa; Editing by Manash Goswami)