* U.S. bank proposals knock oil lower
* Breaks below $75 a barrel support level
* Falling U.S. and European shares weigh
(Updates prices, adds equities paragraph 3)
By Emma Farge
LONDON, Jan 22 (Reuters) - Oil fell under $75 on Friday as
commodities across the board remained under pressure from U.S.
President Barack Obama's proposed reform of banks' trading.
[] []
Obama's proposals to cut proprietary trading raised the
possibility of banks and funds looking again at their
involvement in the commodities sector, where they have boosted
their presence heavily. [] []
A drop in U.S. and European shares also caused oil prices to
extend losses during the day. [] []
U.S. crude <CLc1> was down $1.38 at $74.70 a barrel at 1518
GMT, having fallen below the key $75 a barrel support level. The
contract earlier dropped to $74.58 -- the lowest level since
Dec. 23.
ICE Brent crude <LCOc1> fell $1.52 to $73.06 after earlier
falling to a low of $72.87.
The full implications of Obama's proposals had yet to play
out, analysts said.
"The potential consequences are huge, and the continued
strength and liquidity of markets will depend on how effectively
the banks and their employees are able to to reorganise and
adjust to the new regime, if and when it comes into force," said
leading oil brokerage PVM in a note.
"If you're an oil trader working for a bank, Obama's plan is
not going to help your career."
Oil prices rose to 15-month highs near $84 a barrel in early
January, partly due to an influx of money following a hike in
fund allocations. []
"Potentially, some funds will need to revise their exposure
for the second half of the year," said Petromatrix analyst
Olivier Jakob, referring to both Obama's plan and the package of
proposals unveiled last week by the U.S. futures regulator, the
Commodity Futures Trading Commission.
"For now, it will weigh on sentiment in a global sense,"
said Jakob.
Click here for a graphic showing the impact of Obama's
proposals on commodity markets so far:
http://graphics.thomsonreuters.com/0110/CMD_OBPRC0110.gif
For a related analysis on the implications of the Obama
proposals see here: []
CHINA GROWTH
Concerns that oil-consuming nations could take steps to
temper growth may also weigh on prices going forward, analysts
said.
The world's number two oil consumer China reported fourth
quarter growth of 10.7 percent on Thursday, its first double
digit figure since 2008. []
"Any efforts by the Chinese government to slow the economy
would affect demand for raw materials," said Serene Lim, a
Singapore-based oil analyst at ANZ.
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by William Hardy)
