* European finance ministers debate risk of crisis spreading
* Euro near two-month lows, dollar index inches up
* U.S. federal holiday, financial markets closed
(Updates prices, quotes now LONDON)
By Zaida Espana
LONDON, Nov 25 (Reuters) - Oil edged lower on Thursday on
persisting concerns about European debt, with trading flat ahead
of a U.S. holiday and giving up some of the more-than-3-percent
gains made a day earlier on strong U.S. economic data.
A surprise crude inventory gain in top consumer the United
States last week also pressured prices, with U.S. crude for
January <CLc1> down 20 cents at $83.66 a barrel by 0935 GMT,
after rising $2.61 or 3.2 percent on Wednesday, the biggest
single-session percentage gain in four months.
ICE Brent <LCOc1> declined 19 cents to $85.65.
"It's basically flat from yesterday's close. With
Thanksgiving today, whenever you've a public holiday in the
U.S., people typically wait for NYMEX to reopen for direction,"
BNP Paribas' senior oil market analyst Harry Tchilinguirian
said.
Trading volumes are set to be subdued as the New York
Mercantile Exchange (NYMEX) combines trades for Nov. 25 and Nov.
26 into one single trading session because of Thursday's
Thanksgiving holiday. []
"It's a short week and with the U.S. closed, I don't see
much direction away from yesterday's close," Tchilinguirian
said, adding that euro zone debt developments together with
China's inflation prospects will be the main two drivers behind
risk-appetite.
In the absence of any major economic indicators, market
focus lingered on Ireland's debt woes after Dublin announced a
15 billion euro belt-tightening plan, but failed to quell fears
other euro zone members will run into debt difficulties.
Debt worries kept the euro close to a two-month low, while
the dollar index <=USD>, a measure of its performance against
six other major currencies, inched up 0.3 percent by 0934 GMT.
Oil tumbled to 2010 lows under $65 in May as the Greek debt
crisis dampened confidence about the global economic recovery,
and rebounded to a two-year high of $88.63 on Nov. 11.
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For more on Ireland's debt crisis:
[] and []
For an interactive timeline of the euro zone debt crisis
http://link.reuters.com/kar27p
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Earlier this week, prices dropped to near $80 after North
Korea's deadly artillery barrage against a South Korean island
that boosted the value of the dollar and reduced the appetite
for riskier commodity assets.
U.S. DATA SUPPORTS
Initial jobless benefits claims in the U.S. fell to their
lowest level in more than two years last week while consumer
spending rose for a fourth straight month in October, reports
showed on Wednesday, fuelling hopes the economic recovery is
strengthening. []
U.S. crude oil stockpiles rose 1.03 million barrels in the
week to Nov. 19 as crude imports jumped by more than a million
barrels per day, the U.S. Energy Information Administration
said on Wednesday. []
Analysts polled by Reuters had expected crude stocks to
fall 2.1 million barrels, but the jump reported by the EIA was
much less than the American Petroleum Institute's report
showing stockpiles increased 5.2 million barrels. []
Gasoline stocks rose 1.91 million barrels, the EIA said,
against expectations for a 600,000-barrel draw, and distillate
stocks fell 541,000 barrels, much less than analysts'
expectations for a larger 1.2 million-barrel draw.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Keiron Henderson)
