* Firmer dollar, China's expected policy tightening weigh
* OPEC seen keeping targets steady at Wednesday talks
* Coming Up: Fed rate announcement expected Tuesday
(Recasts, updates prices, market activity; new byline, changes
dateline, previously LONDON)
By Edward McAllister
NEW YORK, March 15 (Reuters) - Oil prices fell nearly 2
percent to below $80 a barrel on Monday, pressured by a
stronger dollar and concerns that potential credit tightening
in China might curb energy demand in the world's second-largest
oil consumer.
Oil markets also awaited this week's U.S. Federal Reserve
meeting to see if it remains committed to low interest rates
and the OPEC ministers' meeting in Vienna where they will
consider output policy.
U.S. crude for April delivery <CLc1> fell $1.57 to $79.67
per barrel by 12:46 p.m. EDT (1646 GMT), after dropping as low
as $79.13, the lowest level since March 2. London Brent crude
<LCOc1> traded down $1.50 at $77.89 a barrel.
"It's all about the dollar's being up, pressuring oil,"
said Phil Flynn, analyst at PFGBest Research in Chicago.
The euro slid against the dollar due to a lack of progress
on a financial aid package for debt-strapped Greece. A stronger
dollar pressures oil and other commodities, making them more
expensive for other currency holders. []
"People are also watching what the Fed might say on
interest rates at its Tuesday meeting," Flynn added. "They are
also concerned about that China might do to rein in hot
inflation."
The U.S. Federal Reserve is expected to hold benchmark
rates near zero and reiterate its pledge to keep them low for
an "extended period" due to the weak U.S. jobs market and
nagging doubts about the economic rebound. []
Consumer inflation in China soared to a 16-month high
according to data last week, prompting more talk of policy
tightening, which analysts say could dent oil demand.
China's central bank is seen raising bank reserve
requirement ratios as early as this week, while some say it may
wait before raising benchmark deposit and lending rates.
Wall Street stocks fell on concerns about the effect any
tightening in China might have on the global economy. []
U.S. industrial output edged up 0.1 percent in February, as
expected, likely restrained by severe storms that hit part of
the country, the Federal Reserve said. []
Oil markets were relatively unmoved after a separate report
showing manufacturing in New York state fell by less than
forecast in March as employment in the sector rose to its
highest level since October 2007. []
But, as U.S. consumers are buying more and companies appear
to be on the verge of hiring again, Fed policymakers may ponder
how long to keep their ultra-low rate pledge. []
On the supply front, the Organization of the Petroleum
Exporting Countries, which pumps at least one in every three
barrels of oil, meets in Vienna on Wednesday to discuss
production policy.
OPEC ministers have said there is no need to change output
targets with oil prices above their preferred range and demand
expected to pick up in the second half. []
(Additional reporting by Chris Baldwin in London, Robert
Gibbons and Gene Ramos in New York, Jennifer Tan in Singapore;
Editing by David Gregorio)
