UPDATE 7-Oil dips in holiday-thinned trade on Gaza, EU data

Thu Nov 22, 2012 2:20pm EST

Related Topics

* Chinese manufacturing grows for first time in 13 months
    * Supply concerns ease on Israel, Hamas truce, doubts remain
    * Euro zone economy outlook darkens, but some feared worse

 (Recasts, updates prices)
    NEW YORK, Nov 22 (Reuters) - Oil dipped in moribund trade on
Thursday, as a ceasefire in the Gaza Strip eased supply concerns
and gloomy manufacturing data for Europe tempered upbeat figures
from China.
    With U.S. financial markets shut for Thanksgiving, thin
conditions left oil prices adrift through the day.
    Some dealers questioned whether the ceasefire late on
Wednesday that ended eight days of conflict between Israel and
Hamas would last; others found reason for hope in data showing
China's manufacturing sector saw expansion accelerate in
November for the first time in 13 months.
    London Brent crude oil futures for January delivery
slipped 31 cents or 0.3 percent to settle at $110.55 a barrel,
off an intra-day high of $111.17. Some 50,000 lots changed
hands, less than one-fifth as much as usual as most U.S.
financial markets were shut for the Thanksgiving holiday.
    U.S. crude was down 23 cents at $87.15 a barrel at
1.30 p.m. EST (1815 GMT), with only 17,000 lots trading. The
U.S. market will not issue a formal settlement until Friday.
    The Gaza ceasefire brokered by Egypt held firm on Thursday,
but both sides said their fingers were still on the trigger.
Schools remained closed in southern Israel. 
    "I think it will last...but it seems as if the market is
pretty sceptical," said Thorbjørn Bak Jensen, an analyst at A/S
Global Risk Management.
    The holiday temporarily deflected attention from talks on
the U.S. "fiscal cliff" - $600 billion worth of tax increases
and spending cuts set to begin in 2013 unless agreement is
reached on the budget deficit.
    Investors fear the measures could derail the U.S. economic
recovery, and the focus is likely to return to the talks after
the holidays. 
    "Quiet Thanksgiving day... keeping one eye on the Middle
East, and the other on the U.S. fiscal cliff," said Tony
Machacek, a broker at Jefferies Bache in London.
    
    DATA SPLIT
    A day after the United States reported that manufacturing
grew in November at its quickest pace in five months, data from
other major economies offered a split view.
    The China HSBC Flash Manufacturing Purchasing Managers Index
(PMI) rose to a 13-month high of 50.4 in November, the latest
indicator of recovery in the real economy after data showing
solid credit growth, firmer exports and rising industrial output
in the previous month. 
    The outlook for Europe in contrast was far bleaker, with
business surveys showing on Thursday the euro zone economy on
course for the worst quarter since early 2009. 
    "Yes, there is bad data out of Europe, ... but Europe is
basically priced in. The market is increasingly optimistic just
looking at how equities are performing, good news out of China,
it's all very constructive," said Seth Kleinman, global head of
energy strategy at Citi.

 (additional reporting by Shadia Nasralla and Simon Falush in
London and Jessica Jaganathan in Singapore; editing by James
Jukwey, Keiron Henderson and Sofina Mirza-Reid)
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