* U.S. initial jobless claims fell last week
* Royal Dutch Shell, Eni post forecast-beating profits
* All eyes on details of Fed's expected QE2 next week
* Technicals show oil to retrace to $81.41 []
(Updates with jobless data, prices)
By Zaida Espana and Isabel Coles
LONDON, Oct 28 (Reuters) - Oil prices rose on Thursday after
data showing jobless claims in the United States fell, sending a
positive signal on the health of the country's economy ahead of
the Federal Reserve's meeting next week.
U.S. unemployment numbers fell to three-month lows over the
last week to 434,000, compared with forecasts of an increase to
453,000. []
"The jobless claims data helped push crude well above $82,
and added to the support from the weaker dollar and stronger
equities," said Gene McGillian, analyst at Tradition Energy in
Stamford, Connecticut.
By 1306 GMT, U.S. crude <CLc1> for December had gained 64
cents to $82.58 a barrel and ICE Brent <LCOc1> was 55 cents
firmer at $83.78.
The market was also supported by Shell <RDSa.L> and Eni
<ENI.MI> beating analyst forecasts with sharp gains in
third-quarter profits, boosted by higher oil and gas prices.
[]
But all eyes remain on the U.S. Federal Reserve, which is
expected to announce a second round of easing after its policy
setting committee meets on Nov. 2-3.
"The price will remain above $80 until the Fed meeting and
then it depends on the outcome, but I think there's a good
chance that we will fall back below the $80 level next week when
Fed measures disappoint market expectations," Commerzbank's oil
analyst Carsten Fritsch said.
"With ample supply, growing risks to global growth
prospects, and increasing potential for a sustained dollar
recovery; the path of least resistance for oil prices points
downwards," Daniel Hwang, senior strategist market strategist at
Gain Capital Forex.com wrote in a note.
The dollar fell 0.8 percent against a basket of currencies
<.DXY>. A weaker dollar typically renders dollar-denominated
commodities cheaper for non-dollar buyers, but can also signal a
tempered growth outlook at the world's largest oil consumer.
The negative correlation between the dollar and crude was at
its strongest in 14 months earlier this week. []
EYES ON QE2
Estimates of the length and amount of the Fed's easing
programme varied widely, ranging from $250 billion to as high as
$2 trillion in a Reuters survey of economists. []
"It's unlikely that QE alone is going to provide the
necessary stimulus for a recovery in commodities. I think there
needs to be a very firm underlying picture of economic health in
the U.S before we see any prolonged or sustained rally," Paul
Harris, a natural resource analyst at Bank of Ireland, said.
Another indication on the pace of growth is due on Friday,
when the U.S. is expected to show a 2 percent increase in
third-quarter GDP growth, up from 1.7 percent in the prior
quarter lifted by an acceleration in consumer spending, a
Reuters poll showed. []
U.S. oil demand jumped last week but gasoline inventories
fell by 4.4 million barrels, the Energy Information
Administration (EIA) reported on Wednesday, dampening the
bearish effect of greater-than-expected gains in crude
stockpiles of more than 5 million barrels. []
Strike action at six French oil refineries ended, but oil
shortages are likely to continue to bite as workers voted to
continue protests at France's two largest oil ports of
Fos-Lavera and Le Havre. []
(Additional reporting by Robert Gibbons in New York and
Alejandro Barbajosa in Singapore; editing by Keiron Henderson
and Sue Thomas)
