* Oil down more than $3 from seven-month high of $70.32
* Dollar up 0.5 percent against basket of currencies <.DXY>
* JP Morgan raises 2009 oil price forecast to $65 per barrel
(Adds detail, comment throughout, updates prices)
By Christopher Johnson
LONDON, June 8 (Reuters) - Oil fell by more than $1 to
around $67 a barrel on Monday as a stronger U.S. dollar prompted
a retreat from a seven-month high above $70 hit last week.
The dollar extended gains against a basket of currencies
after posting its largest one-day rise in over five months on
Friday on data showing the pace of U.S. job losses slowed in
May, prompting expectations of a rise in interest rates. []
A stronger dollar makes commodities such as oil, which is
denominated in the currency, look more expensive to holders of
other currencies.
U.S. light crude for July delivery <CLc1> was down $1.30 a
barrel at $67.14 by 0900 GMT. London Brent crude <LCOc1> was
down $1.20 at $67.14 a barrel.
U.S. futures rose to $70.32 a barrel on Friday, a
seven-month high for the front-month contract, before erasing
some of the gains after the U.S. employment data was released.
U.S. employers cut 345,000 jobs in May, the fewest since
September and far fewer than forecast. []
U.S. crude and Brent both looked to be settling into a range
between $65 and $70 per barrel, traders said, supported by cuts
in output by oil producers but undermined by relatively low
demand for oil in the industrialised countries due to recession.
COMPLIANCE
"Output cuts by OPEC have helped stabilise prices in the
last few weeks but they are not enough to get the market up
towards the $75-$80-per-barrel level," said Christopher Bellew,
oil broker at Bache Commodities in London.
"I think we might be looking at $65-$70 per barrel as a
trading range for a while," he added.
Several members of the Organization of the Petroleum
Exporting Countries, most notably its most influential member,
Saudi Arabia, have said they see around $75-$80 as a fair level
for oil prices and one that would encourage future investment in
the oil and gas industry.
OPEC members have promised to cut 4.2 million barrels a day
of oil from their production levels in September and so far
analysts say they have met 75-80 percent of that pledge.
Venezuelan Oil Minister Rafael Ramirez said on Sunday OPEC
members were complying with 86 percent of promised cuts. A
Reuters survey published last Wednesday said compliance had
slipped to 75 percent from 81 percent in March and April.
JP Morgan <JPM.N> has again raised its forecast for 2009
U.S. oil prices, this time to $65 a barrel, versus $55.63 in
their latest monthly energy report in May, on expectations of
economic recovery and seasonal factors.
"If economic forecasts are right, and we are coming out of
the recession, the path for oil is going to be somewhat higher,"
said Lawrence Eagles, Global Head of Commodities for JP Morgan
Chase at the Asian Oil and Gas Conference. []
European shares fell in early trade on Monday, led lower by
commodity shares and banks. []
Speculative investors have trimmed the number of net long
positions on crude on the New York Mercantile Exchange to 39,687
during the week to June 2, down from 40,122 in the week to May
26, according to data from the U.S. Commodity Futures Trading
Commission released last Friday. []
(Additional reporting by Maryelle Demongeot in Singapore;
editing by Keiron Henderson)
+44 207 542 6056; Reuters Messaging:
christopher.johnson.reuters.com@reuters.net))
