* China official signals monetary tightening next year
* Technicals show oil to retrace to $85.65/bbl
[]
* Coming Up: Euro zone ECB rate decision Dec; 1245 GMT
By Alejandro Barbajosa
SINGAPORE, Dec 2 (Reuters) - Oil slipped on Thursday as
traders focused on rising U.S. crude inventories following a
rally of 3 percent in the previous session, when encouraging
jobs data in top consumer the United States helped drive
prices to their highest in almost three weeks.
Prices also responded to comments from a Chinese central
bank adviser, who said the country's monetary policy was sure
to gradually tighten next year to counter excessive global
liquidity and domestic inflation. []
Optimism that the U.S. would support debt-burdened
euro-zone countries cemented oil's gains of $2.64 on
Wednesday. But on Thursday, the front-month contract <CLc1>
retreated 31 cents to $86.44 a barrel by 0246 GMT, staying
slightly more than $2 away from a 25-month peak of $88.63
reached on Nov. 11.
ICE Brent <LCOc1> fell 29 cents to $88.58, after
surpassing $89 on Wednesday.
"Yesterday's rally was due to general risk on sentiment
and positive economic data from China and the United States,"
said Stefan Graber, a commodities analyst with Credit Suisse
in Singapore.
"The latest data from the U.S. showed that oil inventories
actually rose amid weakening consumption. This could pose a
risk for prices and limit the upside potential in the coming
days, despite the general improvement in market sentiment."
U.S. crude oil inventories rose 1.1 million barrels last
week, the U.S. Energy Information Administration said in a
weekly report on Wednesday, against a forecast for a 900,000
decline in a Reuters poll.
The EIA also reported U.S. gasoline stockpiles rose in
line with forecasts last week, while distillate stocks fell by
less than 200,000 barrels, against projections for a drop of
1.1 million barrels.
But East Coast gasoline stocks fell 937,000 barrels last
week, one of only two regions where supplies of the motor fuel
declined in that period, EIA data showed. That helped boost
gasoline futures to an almost seven-month high.
U.S. private sector payrolls rose by the most in three
years in November, lifting optimism about the job market ahead
of Thursday's weekly initial jobs claims reports and Friday's
monthly government employment report. []
U.S. non farm payrolls likely increased for a second
straight month in November, up 140,000, a Reuters poll showed.
The gain would point to an acceleration in economic activity
and a recovery that is becoming self-sustaining. []
Global manufacturing expanded strongly in China and major
developed countries in November, boosting confidence the
global economy can weather the debt crisis in the euro zone.
[]
The European Central Bank is under pressure to unveil new
steps to stabilize the euro zone when it meets Thursday as the
currency bloc battles a crippling debt crisis that has stoked
contagion fears in the United States and Asia. [ID:nLDE6B00QU
Japan's Nikkei share average rose 2 percent to a
fresh five-month high on Thursday, after Wall Street gained
the most in three months on talk of bold steps to resolve the
EU's debt crisis.
The euro held on to overnight gains early in Asia on
Thursday, having posted its biggest one-day rise in six weeks
in a dramatic turnaround as the market cut short positions
ahead of the European Central Bank policy meeting.
