* Japan, South Korea industrial output disappoints
* Technicals show crude price is neutral []
* Coming Up: U.S. third-quarter GDP; 1230 GMT
(Adds analyst comment, context on dollar link, updates prices)
By Alejandro Barbajosa
SINGAPORE, Oct 29 (Reuters) - Oil fell to below $82 on
Friday as investors, anxious about the form and scale of an
expected monetary easing by the U.S. Federal Reserve next week,
took profits at the end of a month of commodity price gains.
U.S. crude for December <CLc1> fell 42 cents to $81.76 a
barrel at 0437 GMT, little changed from its close last Friday.
ICE Brent <LCOc1> fell 32 cents to $83.27.
"Investors who have made good profits in October are
reducing their long positions, because if the Fed stimulus is
less than market expectations, the dollar will come back up and
commodities will sell off," said Tetsu Emori, a fund manager at
Tokyo-based Astmax Co Ltd.
Prices in October traded mostly between $80 and $85, up
from between $72 and $80 in September, as expectations grew
that the Fed would embark on a fresh round of bond purchases
known as quantitative easing to inject funds into a flagging
economy.
"We think that oil prices have formed a firm base above the
$80 mark with the likelihood of a sharp correction below $80
easing for the remainder of this year," said Stefan Graber, a
commodities analyst with Credit Suisse in Singapore.
The last major economic cue for markets before the Fed
outlines steps to boost recovery in a meeting Nov. 2-3 will be
U.S. third-quarter GDP data due later on Friday.
Top oil consumer the United States is expected to show a 2
percent increase in third-quarter GDP growth, up from 1.7
percent in the second, due to higher consumer spending, a
Reuters poll showed. []
SLUGGISH GROWTH
New claims for U.S. unemployment benefits unexpectedly fell
to a three-month low last week, but the underlying trend still
points to labor market stagnation. []
"People are very worried about a slowdown in economic
growth," Emori said. "Industrial production in some countries
is quite weak."
The economic performance of Japan, the world's
third-largest oil user, is falling short of market
expectations.
Japanese factory output fell for the fourth straight month
in September, the longest streak of declines in more than a
year, adding to signs the economy is losing momentum as slowing
export growth and a strong yen bite. []
Core consumer prices also marked their 19th straight month
of annual declines in September and household spending fell
from August, underscoring how sluggish consumption was keeping
Japan mired in grinding deflation.
And in South Korea, industrial output in September shrank
for a second consecutive month, data showed on Friday, missing
market expectations and adding to concerns about the slowing
global demand. []
The U.S. dollar <.DXY> found a steadier footing against
major currencies on Friday, a day after posting its biggest
fall in over a week as a fickle market turned its attention to
looming U.S. growth data. []
The inverse correlation between the dollar and the price of
crude has weakened over the past two days after reaching its
strongest levels in 14 months earlier this week.
Asian stocks slipped on Friday, led by Japan, on signs of
sluggish consumer electronics demand, while the bruised dollar
steadied, with dealers focused on how upcoming economic data
would impact views on a Fed meeting next week. []
The world's biggest oil companies, Exxon Mobil <XOM.N> and
Royal Dutch Shell <RDSa.L>, reported sharply higher
third-quarter profits on Thursday, beating analysts' forecasts,
as rising energy demand drove up oil and gas prices and
fattened refinery margins. []
