* Oil falls $5 this week on economy, demand, weather
* Downbeat U.S. economic data seen as a dampener
* CFTC rules seen not as strict as expected, relief for now
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, Jan 15 (Reuters) - Oil slipped to around $79 per
barrel on Friday and was set for its first weekly drop in more
than a month on disappointing economic data and expectations for
reduced heating demand in the United States.
A cold snap in many parts of the northern hemisphere helped
push prices above $80 in early January but warmer weather this
week has reduced forecasts for fuel consumption, particularly in
the world's biggest oil consumer.
U.S. retail sales figures also put a dampener on the market
as Commerce Department data showed a decline in December for the
first time in three months.
U.S. crude oil futures for February delivery <CLc1> slid 40
cents to $78.99 a barrel by 0937 GMT. Prices, which have fallen
every day this week, have shed about $5 from a 15-month intraday
high of $83.95 on Monday, and touched a 2010 low of $78.37 two
days ago.
The new front-month March contract for London Brent crude
<LCOc1> slid 55 cents to $78.02.
"We remain negative on the energy markets," said Edward
Meir, senior commodity analyst at brokers MF Global, forecasting
"a gradual retreat towards the mid to high $70s into early next
week as the excessive rally generated on account of colder
weather is rolled back".
IEA
Crude and fuel inventories in the United States rose last
week despite unusually cold weather. Temperatures are now
forecast to exceed the seasonal norm, suppressing consumption.
U.S. demand for distillates, a fuel category which includes
heating oil, was 4 percent below year-earlier levels in the four
weeks ended Jan. 8, a government report showed on Wednesday.
The International Energy Agency kept its forecast for the
increase in oil demand this year almost unchanged in its monthly
oil market report, predicting global oil consumption would rise
by 1.4 million barrels per day (bpd) from 2009. []
World oil demand will be around 86.3 million bpd this year,
still lower than the 86.5 million bpd used in 2007. Consumption
has fallen for the last two years.
Oil prices edged up briefly on Thursday after U.S.
regulators announced proposals to cap the size of positions
dealers can hold, aiming to limit speculation. []
The long-awaited recommendations by the U.S. Commodity
Futures Trading Commission (CFTC) will apply to the four
most-traded energy contracts on the two major exchanges, NYMEX
and ICE.
Analysts said the Commission had produced a set of sensible
and largely workable proposals that would not inconvenience
regular market users. The CFTC said the measures would affect
only the 10 biggest position holders if implemented immediately.
It remains to be seen if the limits are enough to satisfy
Congress members who have clamoured for regulatory action since
oil prices jumped to a record above $147 in July 2008.
Markets awaited the release of further U.S. economic
indicators later on Friday, including industrial production.
[]
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by Sue Thomas)
