* Oil pares previous session's 3 pct gain on profit-taking
* Bernanke's comments help support U.S. dollar
(Updates prices, add JP Morgan comments)
SINGAPORE, Oct 9 (Reuters) - Oil fell to $71 a barrel on
Friday, following the previous session's gain of 3 percent, as
the battered U.S. dollar firmed after U.S. Federal Reserve
chief Ben Bernanke pointed to the chances for tighter monetary
policy.
U.S. crude for November delivery <CLc1> dropped by 74 cents
to $70.95 a barrel by 0701 GMT, after closing $2.12 higher on
Thursday.
London Brent crude <LCOc1> fell 75 cents to $69.02 a
barrel.
In comments that supported the dollar, Bernanke indicated
monetary policy might have to be tightened as an economic
recovery takes hold, adding the Fed could remove its easy money
policies even while its balance sheet remained bloated.
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A weaker greenback supports oil because dollar-priced
commodities become cheaper for buyers using other currencies.
"Oil prices have spiked up too much, so there is some
consolidation now. Continuous concerns of a weak dollar will
keep crude oil supported," said Tony Nunan, a risk management
executive at Tokyo-based Mitsubishi Corp.
Adding to the strength, Kuwait's finance minister said on
Thursday oil trading would remain in U.S. dollars, the latest
denial of a report this week of a move to replace the world's
reserve currency with a basket of currencies. []
The rebound in Asian shares to 14 month-highs on optimism
over U.S. earnings and the global economy gave little support
to crude oil prices.
Higher OPEC seaborne oil exports, excluding Angola and
Ecuador, also weighed on the market. Such exports will rise
160,000 barrels per day (bpd) in the four weeks to Oct. 24, to
22.65 million bpd, according to Roy Mason, an analyst at
British consultancy Oil Movement. []
However, Venezuela said its total crude oil and refined
product exports fell by 230,052 bpd to 2.328 million bpd in
September, after rising in August. []
While lower U.S. unemployment claims signalled a
stabilising labour market, brimming fuel inventories in the
world's top energy user remained a concern.
The U.S. Energy Information Administration (EIA) reported
gasoline stocks leapt 2.9 million barrels last week, nearly
three times the build that analysts had expected. Distillate
stocks, including diesel and heating oil -- rose by 700,000
barrels. []
JPMorgan said in a research note gasoline was likely to do
refiners more harm than good in coming years, as demand had
fallen nearly 340,000 bpd from its July 2007 peak.
"While our expected 16 percent fall in U.S. gasoline demand
is impressive, we hesitate for now to link it to any larger
trend in the global demand profile," it said.
"We expect global oil demand growth will be overwhelmingly
centred outside of the United States in the coming years and
greater U.S. efficiencies may have only a moderating impact on
the overall global oil balance."
(Reporting by Felicia Loo; Editing by Clarence Fernandez)
