* Fed to buy around $600 bln in Treasuries until mid-2011
* Prices target $87, technicals show []
* Coming Up: Eurozone ECB rate decision Nov; 1245 GMT
(Updates with extended price gain)
By Alejandro Barbajosa
SINGAPORE, Nov 4 (Reuters) - Oil rose for a fourth straight
day on Thursday, reaching fresh six-month highs near $86, as
the dollar weakened after the U.S. Federal Reserve unveiled a
plan to buy debt and pump more money into the economy.
U.S. crude for December <CLc1> rose by as much as $1.09 to
$85.78 a barrel, the highest intraday price since May 4, and
was up 1.1 percent at $85.65 at 0759 GMT. ICE Brent <LCOc1>
gained 88 cents to $87.26, having also reached its highest in
six months.
The U.S. central bank on Wednesday said it would buy around
$75 billion in Treasury bonds per month through mid-2011,
totaling around $600 billion. The dollar weakened more than 0.2
percent on Thursday against a basket of currencies, triggering
a rally across commodities. <.DXY>
Wide anticipation of the Fed stimulus measures -- meant to
avert deflation and create jobs by easing long-term borrowing
costs -- boosted the price of oil from within a range of
$72-$80 in September to $80 and above in October and November.
"After the Fed meeting, a trend of weakness in the dollar
will continue, so oil can still move to the upside," said Ken
Hasegawa, a commodity derivatives manager at Japan's Newedge
brokerage.
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.
"Some indices of the economy are showing good data
recently, and in addition the inventory of oil has been
reduced. That is also a good factor to buy," Hasegawa said.
FUEL SURPLUS SHRINKS
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 utilisation
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.
For a graphic: http://link.reuters.com/man63q
The U.S. services sector grew more quickly than expected in
October and factory orders posted their largest gain in eight
months. Also, a 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.
Technical analysis of oil prices, based on trends and
charts, shows a bullish target of $87.04 for U.S. crude remains
unchanged, going by its wave pattern and a channel technique.
"Oil finally went above $85, and now it may go up to $87 or
$88 from a technical point of view as short-covering may be
triggered," Hasegawa said.
"From a fundamental perspective, a price of $90 would be
too high. There is not so much buying interest at that level
and a lot of selling orders would come in."
Asian stocks rose to their highest levels since June 2008
and commodity prices rallied on Thursday after the Fed's new
bond-buying programme kept the hunt on for growth and higher
yields. []
Analysts said markets had widely priced in the Fed move
prior to the announcement, which was for a slightly higher
amount than expected with purchases spread out over a longer
period than anticipated. []
Enbridge Inc <ENB.TO> shut down one of its major oil
pipelines in the U.S. Midwest for the second time in two months
to investigate high-pressure alarms, resuming operations in
less than a day, the company said on Wednesday. []
The 670,000 barrel-per-day pipeline, a main artery for
Canadian crude shipments to the U.S., was turned off as a
precaution late Tuesday and placed back into service on
Wednesday afternoon.
(Editing by Clarence Fernandez)
