* China raises reserves requirements, curbs oil
* China crude oil imports surge in Nov, supporting oil
* Coming up: OPEC ministers meet Saturday in Quito
(Recasts, updates market activity and prices; changes
dateline, previously LONDON)
By Robert Gibbons
NEW YORK, Dec 10 (Reuters) - Oil fell on Friday in volatile
trading as worries about China's moves to cool inflation and
technical selling helped reverse crude from an earlier peak
reached on news of surging Chinese imports.
The dollar and euro seesawed, with the greenback's intraday
strength weighing on oil.
China's central bank on Friday increased the amount of
money lenders must keep on reserve for the third time in one
month, a move to mop up excess cash in the economy and rein in
inflation. []
Concerns that an interest rate hike could be forthcoming
remained even as the reserves boost suggested that perhaps the
Chinese had decided higher rates may not be needed.
U.S. crude for January delivery <CLc1> fell 66 cents to
$87.71 a barrel by 12:41 p.m. EST (1741 GMT), having posted an
intraday $89.00 peak.
Despite reaching a 26-month high of $90.76 on Tuesday, U.S.
crude oil futures are headed for a weekly loss unless a rally
allows for a settlement above $89.19. Oil rose 6.48 percent
last week, a second straight weekly gain.
The week's peak just topped the $70-$90 a barrel price
range that Saudi Arabia and OPEC last month deemed acceptable
to consumers and came as OPEC prepared to meet on Saturday,
with oil ministers expected to retain existing supply targets.
"This looks like a technical move to us. We have had a
period of consolidation after the move up on Tuesday," said
Addison Armstrong, director of market research at Tradition
Energy in Stamford, Connecticut.
Armstrong had pegged support at $87.14 and $86.76.
Total U.S. crude trading volume was tepid, just above
310,800 lots, 52 percent below the 30-day average.
ICE Brent crude for January delivery <LCOc1> fell 57 cents
to $90.42 a barrel, slipping from an early $91.57 peak.
"The market just continues to struggle in the high $80s,"
said Tom Bentz, broker at BNP Paribas Commodity Futures in New
York.
"The Chinese rise in November imports and exports is
supportive but being offset by the China central bank raising
reserves as well as the potential for an interest rate hike
over the weekend."
Bentz pointed to technical selling when prices tested
support at $87.33 and noted U.S. gasoline futures had weakened
after rallying the previous session on a refinery unit
shutdown.
The euro trimmed losses against the U.S. dollar, drawing
some support from comments by European Central Bank President
Jean-Claude Trichet saying the euro zone recovery was on track.
[]
Earlier the dollar firmed against the euro as
better-than-expected U.S. economic data increased the allure of
the greenback, with gains expected to continue if Treasury
yields keep rising.
U.S. Treasury prices fell, capping a week of relatively
aggressive selling spurred by rising growth outlooks and
deficit worries. []
China's crude oil imports jumped 22.1 percent last month
from a year earlier to 5.09 million barrels per day, the
fourth-highest monthly average on record. []
IEA, OPEC VIEWS DIFFER
Two of the world's most influential oil forecasters -- OPEC
and the International Energy Agency -- had different demand
outlooks for 2011 on Friday, as the IEA anticipated robust
demand while producer group OPEC said supply was plentiful.
The IEA, an adviser to 28 industrialized countries, in a
monthly report lifted its 2011 oil demand growth forecast by
130,000 barrels per day to 1.32 million bpd.
OPEC forecast 2011 global oil demand growth would increase
to 1.18 million bpd, only 10,000 bpd more than predicted last
month and making the case for no change in supply policy when
oil ministers meet on Saturday in Quito. []
OPEC's secretary-general has said it wanted an improvement
in oil market fundamentals before increasing crude supplies,
even if prices go to $100 a barrel.
(Additional reporting by Edward McAllister and Janet McGurty
in New York, Una Galani in London and Alejandro Barbajosa in
Singapore; Editing by Dale Hudson)
