* US Nov. output, API weekly oil inventory data due later
* Federal Reserve monetary policy expected Wednesday
* Dollar stronger vs. euro, currency basket
(Updates prices, adds comment)
By Chris Baldwin
LONDON, Dec 15 (Reuters) - Oil paused on Tuesday around $70
a barrel after falling for nine straight days, the longest
continuous decline in eight years, as markets looked to U.S.
storage data and dollar movements for further direction.
U.S. crude for January delivery <CLc1> rose 46 cents to
$69.97 a barrel by 1315 GMT. London Brent <LCOc1> was up eight
cents at $71.97.
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 between Dec. 1 and Dec. 14 in their longest
price slide since July 2001.
"The fall has been truly warranted, because there isn't any
demand anywhere," said Rob Montefusco, oil trader at Sucden
Financial.
"Today the dollar is starting to recover again, but I don't
think we'll be going much higher. The only saving grace is that
colder weather could be coming in, which could perk up demand in
heating oil."
U.S. oil demand peaked at 20.8 million barrels per day (bpd)
in 2005, and on Monday the Energy Information Administration
said oil consumption is forecast to remain "near" its current
level of about 19 million bpd through 2035. []
The dollar hit a 2-1/2 month high against the euro on
Tuesday and rallied to a six-week high versus a currency basket
as questions surrounding the fiscal positions of euro zone
states also curbed risk demand and prompted short covering in
the U.S. currency. [] []
Dollar weakness had boosted dollar-priced commodities in
recent months as they became cheaper for those holding other
currencies.
OPEC OUTPUT
OPEC slightly raised its forecast for world oil demand
growth in 2010 to average 85.1 million bpd, up by a mere 70,000
bpd from its calculations last month. []
Reuters calculations show OPEC production target compliance
slipping to 58 percent in November from 60 percent in October.
"It's not surprising that at current prices countries are
looking to rethink," said commodity analyst Eugen Weinberg at
Commerzbank.
Oil was trading as high as $82 a barrel as recently as
October, and has come up from lows around $33 a barrel since
February. In July, 2008 U.S. crude touched an all-time high of
$147.27.
"What producer countries can do in their budgets at $40 (a
barrel) is a lot different from what they can do when it's at
$80," Weinberg said.
DATA AHEAD
On Tuesday traders were awaiting a weekly American Petroleum
Institute (API) report to see if inventories continue to rise,
and November industrial output figures to examine the vital
signs of the world's largest economy. []
A U.S. Federal Reserve's monetary policy decision due
Wednesday will also be closely watched as interest rates are
expected to stay unchanged at near zero, but comments will be
analysed for clues on when the Fed may start tightening policy.
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. []
(Additional reporting by Jennifer Tan in Singapore, editing by
Keiron Henderson)
