SINGAPORE, Nov 4 (Reuters) - Oil rose for a fourth straight
day on Thursday, trading near six-month highs, as the dollar
weakened after the U.S. Federal Reserve met market expectations
with a plan to buy government debt to boost the economy.
FUNDAMENTALS
* U.S. crude for December <CLc1> rose 43 cents to $85.12 a
barrel at 0022 GMT, after touching $85.36 on Wednesday, the
highest intraday price since May 4. ICE Brent for December
<LCOc1> gained 28 cents to $86.66.
* The U.S. central bank said it would buy around $75
billion in Treasury bonds per month through mid-2011, totaling
around $600 billion.
* Wide anticipation of the Fed stimulus measures -- meant
to avert deflation and create jobs by easing long-term
borrowing costs -- have already boosted the price of oil from
mostly within a range of $72-$80 in September to $80 and above
in October and November.
* The Fed's plans are in line with consensus expectations,
but are less aggressive than some polled by Reuters had
anticipated. Estimates for overall Fed asset purchases ranged
from $250 billion to $2 trillion.
* Following the Fed's announcement, commodities investors
may return to closer scrutiny of the fundamentals of oil supply
and demand and broad economic indicators, analysts said.
* Larger-than-expected fuel inventory declines last week in
top consumer the United States also boosted prices.
* U.S. stocks of gasoline fell by 2.7 million barrels,
while distillate fuels, including heating oil and diesel, slid
by 3.6 million barrels as the country's refineries cut
utilization rates to the lowest since March, the Energy
Information Administration reported on Wednesday. []
* Although fuel stocks fell, U.S. crude stockpiles rose by
2 million barrels last week, EIA figures showed, leaving a
major crude surplus compared to the same period of 2009.
* The U.S. services sector grew more quickly than expected
in October and factory orders posted their largest gain in
eight months. Also, a private report showed U.S. private
employers added more jobs than expected in October.
* More evidence about the state of the U.S. economy, which
would affect future demand, will arrive on Thursday, with
weekly jobless claims data, and Friday, with monthly payrolls
data and the unemployment rate from the Labor Department.
MARKETS NEWS
* An underwhelming financial market response to the Federal
Reserve's massive new round of bond buying on Wednesday is
unlikely to dismay central bank officials who carefully
telegraphed the move to avoid market disruptions.
[]
* Stocks ended a volatile session modestly higher and
medium-term debt prices rose. The dollar fell against the euro
after the Fed but rose against the yen.
* Analysts said markets had widely priced in the Fed move
prior to the announcement, which was for a slightly higher
amount than expected but would spread purchases out over a
longer period than anticipated.
DATA/EVENTS
* The following data is expected on Thursday:
- 0300 Japan PAJ weekly oil inventory data Oct 30
- 0858 Eurozone Markit Services PMI Oct
- 1200 Britain BoE rate decision Nov
- 1230 U.S. Initial Jobless Claims Weekly
- 1230 U.S. Productivity Q3-P
- 1245 Eurozone ECB rate decision Nov
- U.S. ICSC Monthly chain stores Oct
- OPEC World Oil Outlook and Annual Statistical Bulletin
(Reporting by Alejandro Barbajosa; Editing by Manash Goswami)
