(Corrects dollar move in first paragraph to stronger)
* Dollar index recovers from year's low
* U.S. exchange CME says will enforce position limits
* Traders say CME decision heightens worries over fines
(Updates throughout, previous TOKYO)
By Catherine Bosley
LONDON, Sept 14 (Reuters) - Oil fell towards $68 a barrel on
Monday, weighed down by a stronger dollar and by heightened
uncertainty in the market following a decision by a U.S.
exchange to enforce limits on large positions.
U.S. crude for October delivery <CLc1> fell 86 cents to
$68.43 a barrel by 0925 GMT, after having touched a low of
$68.02. London Brent crude <LCOc1> fell 60 cents to $67.09 a
barrel.
The Chicago Mercantile Exchange on Friday pledged to enforce
existing position limits on NYMEX, CME, and other exchanges as
of Sept. 14. []
Traders who are over the position limits will face fines or
can be found guilty of price manipulation unless they get a
hedge exemption, according to an advisory notice by the CME.
"There's a little bit of concerns or question marks about
the CME notice on position limits... with effective date of
today," said Olivier Jakob of Petromatrix in Switzerland.
"That might have made the market a little bit nervous and I
would expect that the market is going to remain a little bit
cautious until we can see through this notice," he said.
Some oil traders told Reuters they interpreted the advisory
as a CME warning it could soon toughen up its enforcement of
position limits on commodities exchanges and potentially offer
fewer exemptions for exceeding those limits in the future.
DOLLAR, OPEC
Adding to pressure on crude prices, the dollar <.DXY> inched
up from a year-low of 76.457 against a basket of six other major
currencies. []
Oil fell over 3.5 percent on Friday, after having risen more
than 5 percent in the first four sessions of last week.
The secretary-general of the Organization of the Petroleum
Exporting Countries said last week a weak dollar, the currency
of the oil market, was a concern and that the group needed
higher average oil prices to step up investment. []
Meanwhile, European equities <> opened lower,
mirroring oil's price decline. Since March 9, equities and oil
have traded in close correlation. For a graph see:
http://graphics.thomsonreuters.com/099/CMD_BRNT20909.gif
On the supply front, Kuwait's oil minister Sheikh Ahmad
al-Abdullah was reported as saying by state news agency KUNA on
Sunday that core Gulf Arab OPEC members Saudi Arabia and Kuwait
were delivering 98 percent of the crude output cuts they had
pledged under OPEC deals. []
OPEC compliance has slipped from a record of more than 80
percent earlier this year to what the Kuwaiti oil minister said
was about 68 percent as crude prices rebounded to a high of $75
in August. []
(Additional reporting by Osamu Tsukimori in Tokyo; Editing by
James Jukwey)
