* Oil set for first weekly rise in 3 weeks
* Concerns over euro zone debt, China inflation linger
(Recasts, adds Korea tension and updates prices)
By Florence Tan
SINGAPORE, Nov 26 (Reuters) - Oil fell on Friday in
post-holiday thin trade as ongoing concerns about a wider debt
crisis in Europe, China's inflation and tensions in Korea
pushed up the dollar.
Investors are treading cautiously, waiting to see how
Ireland's bailout will pan out and if more European countries
will seek financial help. China may also step up measures to
curb accelerating inflation following a recent crackdown on
commodity prices at the world's second largest oil consumer.
The situation in the Korean peninsula remained tense as
South Korea's military reported on Friday that sounds of
distant artillery fire were heard from within the North.
[]
U.S. crude for January <CLc1> remained on track for a 2.5
percent weekly rise after posting the largest daily gain in
four months on Nov. 24 on positive U.S. economic data.
The contract fell 35 cents to $83.51 a barrel at 0656 GMT
as the U.S. dollar strengthened. January ICE Brent <LCOc1>
dropped 62 cents to $85.48 a barrel.
The dollar index hit a new two-month high on
Friday, helped by worries about euro zone debt problems and
North Korea's fresh warning against a U.S.-South Korean joint
military exercises. []
"Trade in currencies, equities and commodities are all
very thin, but it could also be due to the fact that economic
and (oil) inventories data are already factored in the
market," said David Taylor, a Sydney-based analyst at
brokerage CMC Markets.
Oil prices are likely to stay rangebound between low and
mid-$80s as the market keeps a close tab on the macroeconomic
situation, focusing on euro-zone debts and inflation-fighting
measures in China, he said.
The euro hovered near a two-month low against the dollar
on persistent worries about a wider debt crisis in Europe.
"We know the IMF will back loans to Ireland but we don't
know how it will be implemented," Taylor said, adding that the
focus may also turn to Portugal's debts as interest rates for
its bonds have risen sharply.
China has intervened to control fast-rising consumer
prices, raising widespread market talk of an impending
interest rate rise, reinforced by an actual increase in banks'
required reserve ratios last Friday. []
On Thursday, the country's top economic planner said that
a crackdown on commodity prices contributed to a widespread
fall in futures in the last two weeks. []
The country's commodities exchanges have announced
measures to raise margin requirements and widen daily price
movement limits to curb speculation. []
Separately, India has said it will step up crude imports
by over 500,000 barrels per day (bpd) in the next fiscal year
to feed new refineries and fill up storage tanks.
[]
Shell said on Thursday it was restoring production of
Nigerian crude oil after repairing a pipeline damaged by oil
theft in Africa's top exporter last week. []
(Editing by Himani Sarkar)
