* Wall St. slides
* Rockets fired on Israel prompts crude buying-traders
(Recasts, updates prices, quotes, updates dateline from
previous LONDON)
By Edward McAllister
NEW YORK, Sept 11 (Reuters) - U.S. crude oil fell over 1
percent to below $71 a barrel in choppy trade on Friday, as
U.S. equities struggled for traction, raising fears about the
economy and a recovery in energy demand.
U.S. crude for October delivery <CLc1> fell 97 cents to
$70.97 by 11:55 a.m. EDT (1555 GMT) after earlier rising to
$72.90. London Brent crude <LCOc1> fell $1.11 to $68.75 a
barrel.
"Crude put in a high for the week, but there was no follow
through and the dollar and S&P turned around and that helped
pull crude back," said Gene McGillian, analyst at Tradition
Energy in Stamford, Connecticut.
U.S. stocks were hampered by profit taking after five days
of gains and the longest winning streak since November which
had helped boost crude prices earlier in the week.[]
However, analysts and traders say that the current oil
prices reflect sentiment in the market rather than
fundamentals.
"Fuel demand has not recovered and the market needs to see
some demand after going up on sentiment," said McGillian.
Data showed China's crude oil imports in August surged
about 25 percent to a near record high of 19.6 million tonnes
or around 4.6 million barrels. []
Oil hit a year-high of $75 a barrel in late August, from
below $33 in December, as global oil demand recovered.
Crude's climb mirrored a rise in European equities
<>, which were headed for their sixth consecutive session
of gains.
Since March 9, equities and oil have traded in close
correlation.
For a graphic see:
http://graphics.thomsonreuters.com/099/CMD_BRNT20909.gif
News that at least two rockets were fired from southern
Lebanon into northern Israel heightened fears over regional
stability and prompted earlier crude buying, traders said.
[]
The International Energy Agency said that oil demand would
rise this year and next as the global economy recovers,
although it also said oil stocks in the big developed countries
of the OECD were up 4.6 percent in July versus a year ago.
[]
DOLLAR WEAKNESS
The dollar index <.DXY>, a measure of the U.S. unit's
performance against six other major currencies, has dropped 1.9
percent in the past week, and on Friday, it briefly fell as low
as 76.548, its lowest since September 2008. []
A weak dollar, the currency of the oil market, was a
concern for the Organization of the Petroleum Exporting
Countries, and the group needed higher average oil prices to
step up investment in new output, its secretary-general said.
[]
The dollar's slide has helped boost demand for crude this
week, but an analyst at Commonwealth Bank said oil was unlikely
to get much more upward momentum from the greenback.
"Our forecast for currencies is for dollar depreciation --
a lot of that has occurred already and while depreciation has
been an upside driver, that influence may be weakening," said
David Moore, commodities strategist at Commonwealth Bank in
Sydney.
(Additional reporting by Gene Ramos and Robert Gibbons in
New York, Catherine Bosley in London, Nick Trevethan in
Singapore; editing by Marguerita Choy)
