* U.S. bank proposals knock oil lower
* Crude breaks below 100-day moving average
* Falling U.S. stocks weigh
(Recasts, updates prices, market activity)
By Edward McAllister
NEW YORK, Jan 22 (Reuters) - Oil fell to fresh four-week
lows on Friday as equity markets slumped and commodities
remained under pressure from U.S. President Barack Obama's
proposed tightening of bank trading rules. []
[]
U.S. crude <CLc1> fell $1.54 to settle at $74.54 a barrel,
the lowest settlement since Dec. 22, breaking below the 100-day
moving average of $75.20.
ICE Brent crude <LCOc1> fell $1.75 to settle at $72.83.
Obama's proposals to cut proprietary trading raised the
possibility of banks and funds reevaluating their involvement
in the commodities sector, where they have boosted their
presence heavily. [] []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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: []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Energy markets also remained concerned that China's move
this week to restrain credit and cool economic growth will curb
oil demand.
"Traders were selling in response to a number of factors:
Chinese credit tightening, (proposed) sweeping new U.S. banking
and trading changes and this week's DOE snapshot of demand were
all seen as bearish factors," said Peter Beutel, president of
Cameron Hanover in New Canaan, Connecticut.
The U.S. Energy Information Administration's inventory
report on Thursday showed that, while crude inventories fell
slightly last week, gasoline stockpiles were up sharply and
refinery utilization dived. []
Investors have looked to wider economic data over the past
year for signs of economic recovery and a potential rebound in
energy demand.
On Friday, Wall Street slipped as the bank restrictions
weighed and falling technology shares dragged stocks lower.
[]
BANK RESTRICTIONS
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
reorganize and adjust to the new regime, if and when it comes
into force," leading oil brokerage PVM said in a note.
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.
CHINA GROWTH
Concerns that oil-consuming nations could take steps to
temper growth may also weigh on prices, analysts said. The
world's No. 2 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 Gene Ramos and Robert Gibbons in New
York, Emma Farge in London and Alejandro Barbajosa in
Singapore; editing by Jim Marshall)
