* ICE Brent crude around $98, near 27-month highs
* Dollar stronger, euro weakens <.DXY>
* NYMEX-Brent spread narrows after hitting 23-month high
* OPEC says market well supplied, sees higher inventories
(Updates detail, prices, comment)
By Claire Milhench
LONDON, Jan 17 (Reuters) - Oil slipped on Monday while the
dollar strengthened and equities faltered as OPEC said the
market was well supplied and inventories should build in the
first half of the year.
North Sea Brent crude futures on the Intercontinental
Exchange (ICE) consolidated around $6 above U.S. crude oil
futures and were not far below $100 per barrel, a level not seen
since the beginning of October 2008.
U.S. crude for February <CLc1> fell 40 cents to $91.14 by
1243 GMT, while ICE Brent <LCOc1> for March lost 50 cents to
$97.88.
The spread between the two futures contracts has narrowed
since the ICE Brent contract for February expired on Friday. At
one point on Friday, the spread between the two February
contracts hit more than $8.00 a barrel, its widest in 23 months.
U.S. markets were closed for the Martin Luther King holiday
and traders said that was likely to help keep oil futures within
fairly narrow ranges on Monday.
Christopher Bellew, at broker Bache Commodities, said the
stronger dollar had put pressure on commodities markets:
"The oil price has been in an uptrend since the middle of
November and now we are getting close to $100. The weather in
the northern hemisphere has turned a bit milder, and the end of
winter is in sight," Bellew said.
OPEC said on Monday the world oil market remained well
supplied and inventories should build in the first half of the
year, even it raised its 2011 global oil demand growth forecast.
The Organization of the Petroleum Exporting Countries
increased its global oil demand growth forecast by 50,000
barrels per day (bpd) to 1.23 million bpd in 2011. []
PLENTY OF OIL
OPEC said in its monthly report the early onset of winter
weather and an increase in investment flows into commodities
were among the factors behind a recent surge in prices. The
group maintained its view that consumers have enough oil.
The UAE's oil minister said fluctuating prices were not a
worry: "The price keeps going up and down and all I can say for
now is that we are happy," Mohammed al-Hamli told reporters.
Al Hamli said markets were well supplied and prices
reflected market conditions. [] []
But the head of the International Energy Agency, Nobua
Tanaka, said on Monday oil prices were alarming at current
levels and would have a negative impact.
OPEC Secretary General Abdullah al-Badri told an Austrian
newspaper that, while the organization was ready to act to
address supply shortages in the oil market, it would not
intervene if prices were driven by speculation. [].
At this stage, higher output would not stem a rise in oil
prices, as the climb is driven by increasing demand in emerging
countries, chief executive of French oil major Total <TOTF.PA>
Christophe de Margerie told Reuters on Sunday. []
News a key Alaskan oil pipeline was about to reopen after
being closed for over a week also put some extra pressure on oil
prices, analysts said.
The operator of the 800-mile (1,280-km) Trans Alaska
Pipeline System, which has been struggling with a leak in piping
at the Prudhoe Bay intake station, said the oil artery would
resume normal operations later on Monday. []
"We are seeing the end of exceptional support due to supply
disruption on this pipe, and also the weather has become much
warmer than usual both in Europe and in parts of central and
eastern United States. So we are losing some support from cold
temperatures," said Christophe Barret, oil analyst at French
bank Credit Agricole.
Asian shares mostly fell on Monday, led by Shanghai after
China's latest attempt to contain inflation. []
The benchmark Shanghai Composite Index <> closed down
more than 3 percent. The index lost 1.7 percent last week amid
fears over monetary tightening steps. []
European shares [] edged higher on Monday as investors
waited to see if officials would raise the euro zone bloc's
safety fund. The euro <EUR=> eased as the dollar rose against a
basket of currencies <.DXY>.
A weaker dollar tends to support dollar-denominated
commodities such as oil, making them cheaper for holders of
other currencies.
(Additional reporting by Seng Li Peng in Singapore and
Christopher Johnson in London; editing by Anthony Barker)
