* Euro, shares up as IMF, EU agree to Ireland bailout
* Investors await possible China interest rate increases
(Previous SINGAPORE, update throughout)
By Ikuko Kurahone
LONDON, Nov 22 (Reuters) - Oil rose towards $83 on Monday,
along with a relief rally in broader markets, after global
financial authorities agreed to save debt-swamped Ireland and
protect Europe's wider financial stability.
U.S. crude oil futures for January delivery <CLc1> rose 72
cents to $82.70 a barrel by 1003 GMT after the expired December
contract last week marked its largest weekly percentage decline
since the week to Aug. 13.
ICE Brent crude futures <LCOc1> were outperforming U.S.
crude, also reflecting the optimism in the euro zone. The North
Sea benchmark was up $1.02 at $85.36.
The European Union and International Monetary Fund agreed on
Sunday to help bail out Ireland with loans to tackle its banking
and budget crisis after the country formally requested aid. The
deal is expected to total 80 billion to 90 billion euros.
[]
"For this week, it will be important to see if the rescue
plan can stop a chain of risk that may spread into other euro
zone countries facing financial deterioration," Mizuho Corporate
Bank said in its daily commodities research note.
The euro rose to a one-week high against the dollar, hitting
$1.3786. []
A weaker dollar typically supports oil and commodities
prices, boosting investors' appetite for riskier assets, and
because it makes oil cheaper for consumers outside the United
States.
European and most Asian shares rose, outweighing the effect
of Chinese moves to tighten monetary policies to fight
inflation. [][]
Mizuho Corporate Bank cautioned, however, that a further
tightening by China might follow last week's increases in bank
reserve requirements. []
"There are also views that the bank reserve hikes, which
China has introduced recently, are not enough to curb
inflation," the bank said.
China is the world's top energy consumer and any slowdown in
its economy may curb oil demand.
LOWER INVENTORIES
Fredreic Lasserre, global research head for commodities at
Societe Generale, said oil inventories in the United States have
fallen to the levels below those of a year ago and the supply
overhang was becoming thinner than before. []
Fuel inventories in China also fell in October, dropping for
eight months in a row. []
Lasserre said that he expected inventories to fall to 55
days and the market to be in backwardation by the third quarter
of next year and that commodities remain a good hedge against
long-term inflation.
Elderly King Abdullah of Saudi Arabia, the world's top oil
exporter, heads to the United States on Monday for medical
checks for a back ailment, and Crown Prince Sultan is returning
from holiday abroad, state media said on Sunday.[]
The market reaction to concerns about the Saudi ruler's
health has so far been limited.
(Additional reporting by Florence Tan and Luke Pachymuthu in
Singapore, editing by Jane Baird)
