* Stocks, commodities down as dollar rises on euro woes
* Cold spell in Europe, U.S. to provide support
* Chevron suspends production in Nigeria
* Analysts raise price estimates in Reuters poll []
(Releads with price fall, adds analysts, details)
By Dmitry Zhdannikov
LONDON, Dec 20 (Reuters) - Oil fell on Monday ahead of a
January futures contract expiry and due to a stronger dollar,
after failing to capitalise on support from freezing
temperatures in the United States and Europe and a pipeline
attack in Nigeria.
U.S. crude for January delivery <CLc1> fell 60 cents to
$87.42 a barrel by 1531 GMT erasing previous gains of as much as
70 cents. The January contract expires at the end of trading on
Monday. ICE Brent for February <LCOc1> fell 45 cents to $91.21.
"We expect the oil market to continue with its sideways
drift towards year-end, albeit with some weakness likely to
emerge in January," said James Zhang from Standard Bank.
"We continue to view the European debt crisis with caution,
while a potential policy response to rising inflation in China
could also trigger a negative reaction," he said.
U.S. stock indexes turned negative while the U.S. dollar
index <.DXY> rose 0.35 percent versus other currencies and the
euro hit a two-week low as concerns over the euro zone debt
crisis persisted []
"The global risks for the holidays are not small. The
Koreans keep on provoking each other, there is still a risk of
further tightening measures from China and Europe remains full
of surprise with its peripheries and their bond yields," said
Olivier Jakob from Petromatrix.
SUPPORTIVE FACTORS
The oil price fell despite a number of supporting factors,
including freezing temperatures in Europe and the United States.
The U.S. Northeast, the world's top heating oil market, was
expected to be colder than usual from Dec. 24 to 28, according
to weather data released on Friday. []
In Europe, Arctic conditions were expected to continue in
the north this week, potentially prolonging travelling
disruptions []
Gas demand across Britain was expected to hit a record on
Monday, causing National Grid to issue its first gas balancing
alert this winter []
"Weather is cold in the Atlantic Basin and particularly in
Europe. However pricing snowmaggedon episodes for oil demand is
always a bit tricky as it also translates into lower demand for
traveling fuels -- jet, diesel, gasoline," said Jakob.
U.S. heating oil demand is forecast at 4.6 percent above
normal for the week ending Dec. 25. It was 19.6 percent above
normal last week, said the National Weather
Service.[].
However, both gas oil <LGOc1> and heating oil <HOc1> futures
underperformed crude on Monday
Analysts at Credit Agricole noted that heating oil burning
has rose sharply in Germany with the latest data indicating that
German consumer stocks have fallen to 61 percent of capacity in
November, a relatively sharp drop by historical standards.
"Cold weather and growing violence in Nigeria provide an
additional layer of support," analysts at Barclays Capital said
in a note.
U.S. energy firm Chevron <CVX.N> said on Monday it had
suspended production from an oil pipeline in Nigeria's Delta
state [] although Shell <RDSa.L> said it has ended
a one-month force majeure in Nigeria []
A monthly Reuters oil price poll showed on Monday a jump in
estimates for 2011, when analysts expect oil to average $86,
almost $3 up from last month's poll. []
(Reporting by Dmitry Zhdannikov)
