* Alaska oil pipeline restarts after Jan. 8 leak
* Dollar stronger, euro weakens <.DXY>
* NYMEX-Brent spread narrows after hitting 23-month high
* OPEC says market well supplied, sees higher inventories
* Trading volume one-half norm due to U.S. holiday
(Recasts with Alaska pipeline, updates prices throughout)
By Claire Milhench and Jonathan Leff
LONDON/NEW YORK, Jan 17 (Reuters) - Oil slipped on Monday after the dollar
strengthened and a major Alaskan oil pipeline resumed full operations after more
than a week, while an OPEC report said the market remained well supplied.
Prices fell by more than 0.5 percent, their biggest one-day drop since
before a leak forced the temporary closure of the 640,000 barrel per day (bpd)
Trans Alaska Pipeline System on Jan. 8, helping drive Brent crude to nearly $100
a barrel for the first time since October 2008 amidst the financial crisis.
The operator of the 800-mile (1,280-km) line restarted the line on Monday
and said it should reach 500,000 bpd within 24 hours. []
"We are seeing the end of exceptional support due to supply disruption on
this pipe, and also the weather has become much warmer than usual both in Europe
and in parts of central and eastern United States. So we are losing some support
from cold temperatures," said Christophe Barret, oil analyst at French bank
Credit Agricole.
U.S. crude for February <CLc1>, which only traded electronically due to the
Martin Luther King U.S. public holiday, deepened earlier losses to fall by 52
cents to $91.02 a barrel by 3:05 EST. ICE Brent <LCOc1> for March dropped 92
cents to $97.46, although trade volume was only half its norm.
The spread between the two futures contracts has narrowed since the ICE
Brent contract for February expired on Friday. At one point on Friday, the
spread between the two February contracts hit more than $8.00 a barrel, its
widest in 23 months.
OPEC UNFAZED
In its monthly report on market conditions, OPEC maintained its view that
consumers have enough oil, blaming the run-up in prices on the early onset of
winter weather and an increase in investment flows into commodities.
The Organization of the Petroleum Exporting Countries increased its global
oil demand growth forecast by 50,000 barrels per day (bpd) to 1.23 million bpd
in 2011, and said the world oil market remained well supplied and inventories
should build in the first half of the year. []
The UAE's oil minister said fluctuating prices were not a worry: "The price
keeps going up and down and all I can say for now is that we are happy,"
Mohammed al-Hamli told reporters.
Al Hamli said markets were well supplied and prices reflected market
conditions. [] []
But the head of the International Energy Agency, Nobua Tanaka, said on
Monday oil prices were alarming at current levels and would have a negative
impact.
OPEC Secretary General Abdullah al-Badri told an Austrian newspaper that,
while the organization was ready to act to address supply shortages in the oil
market, it would not intervene if prices were driven by speculation.
[].
At this stage, higher output would not stem a rise in oil prices, as the
climb is driven by increasing demand in emerging countries, chief executive of
French oil major Total <TOTF.PA> Christophe de Margerie told Reuters on Sunday.
[]
Oil prices were also undermined on Monday by modest gains in the U.S. dollar
and weakness in equity markets, particularly China, where the the benchmark
Shanghai Composite Index <> closed down more than 3 percent.
[]
(Additional reporting by Seng Li Peng in Singapore and Christopher Johnson in
London; editing by Anthony Barker and Martin Golan)
