* Dollar pulls up from 14-month trough
* Market shrugs off IEA's more positive demand outlook
* Brimming U.S. oil product stocks still in focus
(Changes dateline to London, updates throughout)
By Emma Farge
LONDON, Oct 9 (Reuters) - Oil fell towards $71 a barrel on
Friday, trimming a 3 percent gain in the previous session, as a
bounce in the dollar outweighed a more positive demand outlook
from the International Energy Agency.
U.S. crude for November delivery <CLc1> fell 48 cents to
$71.21 a barrel by 0910 GMT, after closing more than $2 higher
on Thursday.
London Brent crude <LCOc1> fell 42 cents to $69.35 a barrel.
In comments that supported the dollar, U.S. Federal Reserve
Chairman Ben 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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The dollar sank to a 14-month low against a basket of
currencies earlier this week.
A weaker greenback tends to support 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 credence to the dollar, 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 unit with a basket of currencies. []
The International Energy Agency (IEA) revised its global oil
demand growth estimate for 2010 but analysts said this
expectation was already priced into the market.
It also raised its oil demand forecast for the remainder of
the year. []
"The IEA report did not have a significant impact as it's in
line with the broad consensus for this year's outlook," said oil
analyst at JBC Energy David Wech.
Analysts said that high oil product stocks in the world's
top energy user remained a concern and could lessen the market
impact of any signs of improving demand.
The U.S. Energy Information Administration (EIA) on
Wednesday 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 to fresh 26-year highs. []
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. []
(Additional reporting by Felicia Loo; editing by Keiron
Henderson)
