* 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
(Updates throughout, previous SINGAPORE)
LONDON, Dec 15 (Reuters) - Oil stayed below $70 a barrel on
Tuesday, dipping in its tenth straight session to an 11-week low
on persistent worries over hefty stockpiles and sluggish demand.
U.S. crude for January delivery <CLc1> fell 3 cents to
$69.48 a barrel by 0845 GMT. London Brent <LCOc1> was unchanged
at $71.89.
U.S. crude settled down 36 cents at $69.51 on Monday, its
lowest settlement level since Sept. 29. Oil prices fell more
than $8 a barrel from Dec. 1-14 in the longest price slide since
July 2001.
Traders will wait for a U.S. weekly oil inventory report
from the American Petroleum Institute (API) to see if stockpiles
continue to rise, and November industrial output figures for
clues on the health of the world's largest economy.
Stocks at Cushing, Oklahoma have swelled by 7.8 million
barrels in the last six weeks to 33.4 million barrels
<USOICC=ECI>, pressuring U.S. crude 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 will
also be closely watched. Interest rates are expected to stay
unchanged at near zero, but comments will be analysed for clues
as to when the Fed might start tightening policy.
MODEST
"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.
U.S. heating demand may not provide much price support. The
National Weather Service estimated that demand for heating oil
in the 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 road to recovery when the Federal
Reserve unveils 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. []
On Tuesday, the U.S. dollar held steady against a basket of
major currencies, while Asian stocks wavered as investors turned
cautious ahead of the Fed policy meeting. But Abu Dhabi's
decision to throw a lifeline to Dubai continued to bolster risk
appetite. []
(Additional reporting by Jennifer Tan in Singapore, editing by
Sue Thomas)
