* US Nov output, API weekly oil inventory data due later
* Awaits outcome of two-day Fed meeting
* US heating demand this week to offer little price support
By Jennifer Tan
SINGAPORE, Dec 15 (Reuters) - Oil was steady below $70 a
barrel on Tuesday, after slumping for a ninth straight session
the previous day to an 11-week low on persistent worries over
hefty stockpiles and sluggish demand.
Traders will scour the U.S. weekly oil inventory report
from the American Petroleum Institute (API) to see if
stockpiles continue to rise, and a slew of economic data,
including November industrial output figures, for clues on the
health of the world's largest economy.
Oil prices fell more than $8 a barrel from Dec. 1-14 in the
longest price slide since July 2001, as rising inventories in
the United States cast doubts over the pace of demand recovery
in the world's top energy consumer.
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 as concerns grew over an
oil glut in the U.S. Midwest.
The U.S. Federal Reserve's monetary policy decision, to be
announced on Wednesday after a two-day meeting, will also be
closely watched. Interest rates are expected to stay unchanged
at near zero, but the tone of any comments made will be
analysed for clues as to when the Fed might start tightening
policy.
Crude for January delivery <CLc1> rose 29 cents to $69.80 a
barrel by 0230 GMT, after settling down 36 cents at $69.51 on
Monday, the lowest settlement since Sept. 29. London Brent
crude <LCOc1> was up 9 cents at $71.98.
"We've seen an extremely modest rebound in oil so far,
after nine straight sessions of losses, and the downside is
still very much intact," said Michelle Kwek, an analyst with
Informa Global Markets in Singapore.
"Normally, demand perks up during the winter, but so far,
demand has been abnormally weak, and this has been a major
concern. We could see oil heading down towards $65," she added.
The recent slide in U.S. crude prices could trigger further
selling, as oil prices plummet through technical support
levels, analysts said.
U.S. heating demand this week may not provide much price
support. The National Weather Service estimated that demand for
heating oil -- the favoured heating fuel of the Northeast
United States -- would be about 1.3 percent below normal this
week. []
On the supply side, U.S. crude inventories were expected to
have fallen by 2 million barrels last week, according to a
preliminary Reuters poll of analysts.
Distillate stocks probably fell 700,000 barrels, while
gasoline stocks were seen up by 1.1 million barrels. []
The U.S. Energy Information Administration (EIA) will
release its own inventory figures on Wednesday.
The Organization of the Petroleum Exporting Countries is
expected to hold production targets steady at its next meeting
on Dec. 22. OPEC has been quietly putting more oil on the
market since April, as prices rallied from below $33 a barrel
last December.
On a brighter note, economic data due later could show that
the U.S. economy is on a slow and patchy road to recovery.
The Federal Reserve will unveil November industrial
production and capacity utilisation data at 1415 GMT.
Economists forecast a 0.5 percent increase in output, up from a
0.1 percent rise in October, while capacity utilisation is
expected to rise to 71.1 percent from 70.7 percent in October.
[]
(Editing by Michael Urquhart)
