* 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
(Adds Goldman comments, forecasts through 2012)
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 18 cents to $86.57 a barrel by 0426 GMT, staying
slightly more than $2 away from a 25-month peak of $88.63
reached on Nov. 11.
ICE Brent <LCOc1> fell 11 cents to $88.76, 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 posted a surprise gain of 1.1
million barrels last week, the U.S. Energy Information
Administration said in a weekly report on Wednesday.
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, with projections for a drop of 1.1
million barrels.
But U.S. 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 on
Wednesday.
MEDIUM-TERM OUTLOOK
Goldman Sachs says OPEC will increase oil production next
year, gradually brining spare capacity on line, following a
drawdown in global inventories this year as demand grows by
2.4 percent, with prices for U.S. crude at an average $100 a
barrel in 2011 and $110 in 2012. []
"We expect in 2011 and 2012 that the transition from a
cyclical recovery to a new structural bull market will lead to
new record annual average prices above the 2008 high of just
under of $100 a barrel," Goldman said in the Dec. 1 report.
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 (ECB) 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 hit a five-month peak and the
euro stayed within sight of overnight highs on Thursday ahead
of the ECB meeting.
(Reporting by Alejandro Barbajosa; Editing by Ed Lane)
