* Dollar pulls up from 14-month trough
* Market shrugs off IEA's more positive demand outlook
* Brimming U.S. oil product stocks still in focus
(Updates prices, adds detail)
By Emma Farge
LONDON, Oct 9 (Reuters) - Oil fell below $71 a barrel on
Friday, trimming a 3 percent gain in the previous session, as a
bounce in the dollar outweighed a more positive demand outlook
from the International Energy Agency.
U.S. crude for November delivery <CLc1> fell 15 cents to
$71.54 a barrel by 1325 GMT, after hitting a daily low of
$70.62.
London Brent crude <LCOc1> rose 4 cents to $69.81 a barrel.
In comments that supported the dollar, U.S. Federal Reserve
Chairman Ben Bernanke indicated monetary policy might have to be
tightened as an economic recovery takes hold. []
"Overnight, the dollar index received some support from
Bernanke's comment," said oil analyst Olivier Jakob of
Petromatrix in a research note, adding that equities and the
dollar were likely to remain the key price drivers in the
short-term.
Falling U.S. shares accelerated losses on Friday. []
Earlier this week, the dollar sank to a 14-month low against
a basket of currencies.
A weaker greenback tends to support oil because
dollar-priced commodities become cheaper for buyers using other
currencies.
Adding credence to the dollar, Kuwait's finance minister
said on Thursday oil trading would remain in U.S. dollars, the
latest denial of a report this week about a move to replace the
world's reserve unit with a basket of currencies. []
DEMAND FORECASTS
On the demand side, the IEA, adviser to 28 industrialised
countries on energy policy, revised its global oil demand growth
estimate for 2010 but analysts said this expectation was already
priced into the market.
It also raised its oil demand forecast for the remainder of
the year. []
"The IEA report did not have a significant impact as it's in
line with the broad consensus for this year's outlook," said oil
analyst at JBC Energy David Wech.
Earlier this week, the U.S. governemnt Energy Information
Administration (EIA) raised its oil demand forecast amid signs
the economic climate is improving.
Analysts said that high oil product stocks in the world's
top energy user would cap price gains going forward.
The EIA on Wednesday reported gasoline stocks leapt 2.9
million barrels last week, nearly three times the build analysts
had expected. Distillate stocks, including diesel and heating
oil -- rose by 700,000 barrels to fresh 26-year highs. []
Higher OPEC seaborne oil exports, excluding Angola and
Ecuador, also weighed on the market. Such exports will rise
160,000 barrels per day (bpd) in the four weeks to Oct. 24, to
22.65 million bpd, according to Roy Mason, an analyst at British
consultancy Oil Movement. []
(Additional reporting by Felicia Loo; editing by Keiron
Henderson)
