* Oil falls over $3 to below $104
* U.S. lawmakers aiming to vote on Monday on bailout
* Fortis nationalised, Britain set to nationalise Bradford
and Bingley
* Iran avoids new sanctions in UN council vote
(Updates prices, adds details)
By Fayen Wong
PERTH, Sept 29 (Reuters) - Oil fell over $3 to below $104 a
barrel on Monday, pressured by gains in the U.S. dollar and
growing worries that the U.S. government's planned $700 billion
rescue plan would not ease wider economic problems.
Signs that the financial crisis is spreading beyond the
United States to Europe, where Belgian-Dutch group Fortis and
British mortgage lender Bradford & Bingley <BB.L> faced
nationalisation, also worsened Europe's economic outlook and
cast a pall over energy demand.
U.S. light crude for November delivery <CLc1> fell $3.11 to
$103.78 a barrel by 0752 GMT, adding to Friday's losses of
$1.13.
London Brent crude <LCOc1> fell $2.88 to $100.66.
"There are two factors at play here. One is the short term
effect of a rally in the U.S. dollar and second is ongoing
concerns about U.S. demand and elsewhere. I think the demand
destruction will be significant enough to cut quite deeply into
oil prices," said Jonathan Kornafel, Asia director of Hudson
Capital Energy in Singapore.
The U.S. dollar rose over 1 percent against the euro on
Monday, first on hopes a bailout bill would soon be passed and
later boosted by a further decline in the euro due to growing
concerns about the financial system as the toll from the credit
crisis spreads to Europe. []
U.S. congressional leaders from both parties said they had
reached a tentative agreement on Sunday and were gearing up to
vote on the rescue plan on Monday, but questions abound as to
whether the plan would restore confidence to shaky markets and
head off a deep recession. []
Although the oil market has not been short of bullish news
in the past few months, prices are still down 28 percent from
record highs above $147 a barrel struck in July as the economic
crisis and high fuel costs hurt demand in the United States and
other developed economies.
Analysts said mounting evidence of an economic slowdown in
U.S., Europe and Japan would continue to weigh on prices.
"While supply-side uncertainty suggests a floor near $100,
the economic context for this quarter and next is weak,
suggesting price rallies will be capped and/or sold into,"
Harry Tchilinguirian, a senior oil market analyst at BNP
Paribas, said in a research report.
News that Iran, the world's fourth-largest exporter of oil,
has avoided new sanctions in a United Nations vote over the
weekend also hit prices on Monday.
The U.N. Security Council unanimously passed a resolution
on Saturday that again orders Iran to halt its nuclear
enrichment work but imposes none of the new sanctions
Washington and its allies wanted. []
But analysts said a slow recovery in oil and gas production
in the U.S. Gulf of Mexico, home to a quarter of U.S. output,
could offer some support for prices in the short term.
Some 57.4 percent of oil production and 52.8 percent of
natural gas output in the Gulf of Mexico remained shut as of
Sept. 25, the Minerals Management Service said on Friday.
[]
(Editing by Michael Urquhart)
