* Oil steadies after falling to lowest since Oct. 5
* Dollar falls against currency basket, stocks rise
* Demand concerns, technicals still pressure crude
(Adds detail and changes dateline from previous LONDON)
By Joshua Schneyer
NEW YORK, Dec 14 (Reuters) - Oil fell below $70 a barrel on
Monday, adding to losses of more than 10 percent over the
previous eight sessions, as weak fuel demand overshadowed gains
in equity markets and a weaker dollar.
Oil has been falling on sluggish recovery in global fuel
demand from the deepest recession since World War II, and
rising inventory levels in the United States. Crude has fallen
by more than $8 a barrel since Dec. 1.
Prices rebounded slightly on Monday after earlier falling
as much as 1.8 percent, following an announcement that Abu
Dhabi bailed out Dubai with $10 billion in aid for Dubai World,
easing fears of a potential debt default, and boosting stocks
markets. []
"The fundamentals of oil demand are weak, and as the year
comes to an end, people have been paying more attention to
them," said Gene McGillian, analyst at Tradition Energy in
Connecticut. "After falling so much, the market is trying to
stem the slide but it hasn't really happened yet."
A nine-day slide in oil prices would be the longest since
July of 2001.
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Graphic of oil prices: http://link.reuters.com/pyk76g
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Crude for January delivery <CLc1> fell 27 cents to $69.60 a
barrel by 1:58 p.m. EST (1858 GMT), after falling to $68.59
earlier in the session, the lowest level since Oct. 5. Brent
crude <LCOc1> traded up 9 cents at $71.97 a barrel.
Stocks at Cushing, Oklahoma, the delivery point for NYMEX
WTI crude futures, have swelled by 7.8 million barrels in the
last six weeks to 33.4 million barrels <USOICC=ECI>, putting
pressure on WTI for near-term delivery, on concern of an oil
glut in the U.S. Midwest.
The recent slide in U.S. crude prices may still trigger
further selling, as oil prices plummet through technical
support levels, analysts said. The move below the $70-a-barrel
level may lead to further losses, since there is little
technical support for prices above $65.
Oil's recent plunge has "turned the chart patterns
distinctly negative," said Edward Meir, analyst at MF Global.
"The question now becomes where we head from here, and from
the looks of things, we suspect there is more downside to go."
Oil rebounded from earlier losses Monday, and briefly
traded in positive territory, as the dollar weakened <.DXY>.
Losses in the greenback have typically sent oil prices higher
this year, since oil is priced in dollars and becomes cheaper
to holders of foreign currency.
Crude was also helped by strength in equities markets, as
the S&P 500 index rose <.SPX>, spurred on by news that U.S. oil
giant ExxonMobil plans to buy natural gas supplier XTO Energy
Inc in an all-stock transaction valued around $31 billion.
[]
Traders will look to U.S. crude and product inventory data
due out on Tuesday and Wednesday, as well the U.S. Federal
Reserve's monetary policy decision, to be announced on
Wednesday, as potential drivers for oil prices later in the
week. Interest rates are expected to stay unchanged at near
zero.
Ministers from the Organization of the Petroleum Exporting
Countries say the group is likely to hold its output targets
steady at a Dec. 22 meeting. OPEC has been quietly putting more
oil on the market since April, as prices rallied.
Oil has risen from below $33 a barrel last December.
Keeping targets steady at the meeting, in Angola, would allow
OPEC to continue to make unofficial adjustments in supply
depending on the pace of economic recovery and prices next
year.
(Additional reporting by Alex Lawler in London, Matthew
Robinson in New York, and Osamu Tsukimori in Tokyo; Editing by
Marguerita Choy and Lisa Shumaker)
(Reporting by Joshua Schneyer)
