* Oil falls more than $6 a barrel
* U.S. politicians to vote on banking bailout
* Iran avoids new sanctions in UN council vote
(Updates prices)
By Jane Merriman and Alex Lawler
LONDON, Sept 29 (Reuters) - Oil fell more than $6 a barrel
to $100 on Monday, pressured by gains in the U.S. dollar as well
as more signs the financial crisis is spreading beyond the
United States to Europe.
U.S. regional bank Wachovia Corp <WB.N> succumbed to the
credit crisis on Monday and authorities stepped in to rescue
three European banks as U.S. lawmakers prepared to vote on a
$700 billion financial bailout plan.
U.S. crude <CLc1> fell $6.55 to $100.34 a barrel by 1430
GMT, having fallen as low as $99.80 earlier in the session.
London Brent crude <LCOc1> lost $6.21 to $97.33.
"There are two factors at play here," said Jonathan
Kornafel, Asia director of Hudson Capital Energy in Singapore.
"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."
The euro fell against the dollar on Monday as the financial
crisis spread further outside the United States. The dollar
rallied as the proposed financial rescue plan looked set for
approval.
U.S. congressional leaders from the Republicans and the
Democrats said they had reached a tentative agreement on the
bailout plan on Sunday and prepared to vote on it on Monday.
Questions remain over the ability of the plan to restore
confidence to shaky markets and head off a deep recession.
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DEMAND DESTRUCTION
"From a commodity perspective, our more pressing concern is
to what extent the U.S. virus spreads globally and specifically
to China," said Deutsche Bank in a research note.
"We expect demand destruction fears into early 2009 will
bear down on many commodity prices."
Falls in demand in the United States and other developed
economies have contributed to oil's drop from a record high of
$147.27 a barrel in July.
Analysts said mounting evidence of an economic slowdown in
the United States, 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.
The slow pace of recovery following shutdowns due to
hurricanes 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.
Iran, the world's fourth-largest exporter of oil, avoided
new sanctions in a United Nations vote at the weekend.
The U.N. Security Council unanimously passed a resolution on
Saturday that again ordered Iran to halt its nuclear enrichment
work but imposed none of the new sanctions Washington and its
allies wanted. []
Political tensions over Iran's nuclear programme was one of
the factors that helped drive oil higher this year.
(Additional reporting by Fayen Wong in Perth; editing by Karen
Foster/James Jukwey)
