* Gold hits record on inflation fears that also boost oil
* Dollar bounce on euro zone concerns limits oil rise
* Coming up: API oil inventory data, 4:30 EST Tuesday
NEW YORK, Nov 9 (Reuters) - U.S. oil prices edged lower in
seesaw trading on Tuesday, pressured by the dollar's bounce
after being lifted by inflation concerns that sent prices to a
two-year peak earlier.
Traders and brokers said U.S. oil futures were trying to
consolidate above $87 a barrel after last week's monetary
easing by the Federal Reserve and a better-than-expected
October jobs report helped oil prices push through the previous
2010 peak of $87.15 from May.
Expectations about inflation and pressure on the greenback
and other currencies after the U.S. central bank's actions to
bolster the U.S. economic recovery have boosted crude prices
and sent gold to a series of record peaks.
U.S. crude for December delivery <CLc1> fell 11 cents to
$86.95 a barrel at 1:33 p.m. EST (1833 GMT), having retreated
from an early $87.63 intraday peak, the highest price since
$89.82 was struck on Oct. 9, 2008.
U.S. crude prices on Monday posted a sixth straight higher
close, adding to the 6.6 percent gain last week, the biggest
percentage weekly gain since February.
On Tuesday, ICE December Brent crude <LCOc1> rose 6 cents
to $88.52 a barrel.
"Dollar pared its loss and turned positive, though not by
much so far, and that helped pull crude back," said Chris
Dillman, analyst at Tradition Energy in Stamford, Connecticut.
The euro struggled for a third straight session on Tuesday,
swinging from gains to losses as investors worried about Irish
and Portuguese debt and hedged sizable bets against the U.S.
dollar. []
For a graphic:http://link.reuters.com/fer54q
IEA SAYS SUPPLY PEAK AHEAD
Oil received a lift earlier from the International Energy
Agency's long-term energy outlook released on Tuesday, in which
the Paris-based agency said global oil supplies will near a
peak by 2035 and that oil prices might exceed $100 a barrel in
2015 and $200 in 2035. [] []
"We believe the age of cheap oil is over. Both on the
demand side and the supply side, in order to find market
equilibrium, we may need higher prices in the future," the
IEA's chief economist Fatih Birol said at a news conference.
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Reuters Insider interview with IEA chief Nobuo Tanaka
http://link.reuters.com/ger54q
Graphic:
http://graphics.thomsonreuters.com/F/11/OIL_IEAP1110.gif
IEA on energy subsidies: []
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Prices had little reaction on Tuesday to the U.S. Energy
Information Administration boosting its 2011 world oil demand
forecast by 33,000 barrels per day. []
The EIA increased its forecast 2011 decline in non-OPEC
crude oil production by 10,000 bpd from the agency's prior
estimate, but increased its forecast growth in non-OPEC oil
output for 2010 by 110,000 bpd. []
INVENTORIES
Investors will turn their attention to weekly inventory
reports, starting with the American Petroleum Institute's oil
stocks report at 4:30 EST p.m. (2130 GMT) on Tuesday.
U.S. crude inventories were forecast to be have increased
by 1.4 million barrels in the week to Nov. 5 as imports
rebounded, a Reuters analyst survey showed. []
The survey yielded a forecast drop in distillate stocks,
including heating oil and diesel fuel, by 1.9 million barrels,
with gasoline stocks down 800,000 barrels.
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For a PDF of Reuters reports on this and related topics,
click: http://link.reuters.com/tef34q
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The API report will be followed by the U.S. EIA's report on
Wednesday at 10:30 a.m. EST (1530 GMT).
(Additional reporting by Alejandro Barbajosa in Singapore and
Ikuko Kurahone and Zaida Espana in London;editing by Sofina
Mirza-Reid)
