(Repeats without changes)
* Spectre of China interest rate continue to weigh
* Market worries about Euro sovereign debt
* Coming Up: U.S. retail sales, business inventories data
(Updates prices)
By Rebekah Kebede
PERTH, Nov 15 (Reuters) - Oil rose to $85 a barrel on
Monday, making a small recovery from last week's plunge in
commodity prices as some investors bargain hunted.
But the prospect of Chinese interest rate increases and
uncertainty about sovereign debt in Europe continued to weigh
on the market, capping gains, analysts said.
U.S. crude for December delivery <CLc1> rose 15 cents to
$85.03 a barrel at 0530 GMT.
ICE Brent <LCOc1> rose 22 cents to $86.56.
Last week oil prices soared to their highest levels since
October 2008, touching an intra-day peak of $88.63 on Thursday,
before concerns that a Chinese interest rate hike was imminent
pressured prices on Friday.
Although China's central bank did not announce a rate
increase at the weekend, continued worries about Chinese
monetary tightening reduced the appetite for risk, analysts
said.
"The market is worried about consumption, that China will
introduce interest rates that will slow demand and as a result
of that you could find that oil could trade a lot lower," said
Jonathan Barratt, managing director of Commodity Broking
Services in Sydney.
Analysts said that continued concerns about demand could
depress oil prices down to the $80 a barrel level.
On Monday, the head researcher for the People's Bank of
China called for tightening of monetary conditions. Last month,
PBOC surprised markets by announcing the first rate rise in
nearly three years. []
Concerns about European sovereign debt, especially in
Ireland, also continued to weight on market sentiment, with
Ireland saying that it could not rule out turning to Europe for
help in dealing with its debt crisis. []
Worries about European sovereign debt were compounded by
the G20 and APEC meetings, where leaders of the world's most
powerful economies failed to reach any agreement on how to
prevent fresh crises.
The International Energy Agency (IEA), an adviser to 28
industrial countries, predicted on Friday oil demand growth
will slow in 2011, while raising its 2010 forecast, providing
no comfort to traders looking for a more sustained global
demand recovery. []
The new downward pressure on oil prices interrupts a
two-week rally in oil, which was fueled partly on signs that
the Organization of the Petroleum Exporting Countries (OPEC)
can tolerate higher oil prices and on a plan by the U.S.
Federal Reserve to buy $600 billion in Treasury bonds to help
speed economic growth.
(Editing by Ed Lane)
