* Dollar strength and falling equities hold oil down
* US oil demand hasn't recovered since financial crisis
* BP CEO sees oil trading in $60-80 range through year end
(Recasts, updates prices, market activity; new byline, changes
dateline, previously LONDON)
By Joshua Schneyer
NEW YORK, Jan 28 (Reuters) - Oil prices fell toward $73 a
barrel on Thursday, holding near six-week lows, as a stronger
dollar curbed demand for crude and after data showed fuel
demand has not recovered from the worst U.S. financial crisis
in decades.
U.S. crude oil futures <CLc1> fell 25 cents to $73.42 a
barrel by 12:05 p.m. EST (1705 GMT), after falling as low as
$72.65 on Wednesday, the lowest level since Dec. 14. Brent
crude futures <LCOc1> fell 26 cents to $71.98 a barrel.
Oil prices had risen earlier, after U.S. President Barack
Obama's state of the union speech Wednesday night focused on
U.S. job creation and not his administration's plan to curb
trading practices among banks. The speech did not reveal
specific measures that could limit oil trading.
But a stronger U.S. dollar and a dip in equities markets
later pushed oil prices into a third day of declines. The
dollar rose to its highest level in more than six months
against the euro, which fell on concern over potential fiscal
crises in European economies including Greece and Portugal.
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A stronger dollar often indicates investors are funneling
cash away from riskier assets like commodities. It also can
curb demand for crude oil from buyers who hold other
currencies, since oil is priced in dollars.
Oil prices have plunged by more than $10 a barrel since
briefly rising over $84 a barrel as recently as Jan. 11, their
highest level in more than a year.
Prices are not likely to reach that high again this year,
the CEO of oil major BP told Reuters.
"I would expect that the oil price will trade within the
current range for the remainder of this year, (at) $60-80 per
barrel," BP CEO Tony Hayward told Reuters in Davos, Switzerland
on Thursday. He noted world oil demand has fallen by 2 million
barrels a day since 2007.
Fuel demand has remained weak in the United States, the
world's top consumer. Data released Wednesday by the U.S.
Energy Information Administration showed total U.S. petroleum
product demand over the last four weeks fell 2 percent from the
same period of 2009, a sign demand is slow to recover from lows
hit during the financial crisis and recession. []
"U.S. oil demand is still contracting against a level last
year when it was at the worst of the recession," said Harry
Tchilinguirian, senior oil analyst with BNP Paribas.
U.S. crude stocks fell last week, EIA data showed, but
gasoline and distillate stocks rose even though U.S. refinery
utilization rates remained near their lowest since the 1980s.
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"With weak demand and plentiful supply this (oil) complex
is the definition of bearish," said PFGBest Research energy
analyst Phil Flynn, in a morning note.
Thursday's U.S. economic data cast further doubt over the
pace of economic recovery. Initial U.S. jobless claims fell
less than expected last week, while durable goods orders
increased less than expected in December. See []
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(Additional reporting by Ikuko Kurahone in London, Robert
Gibbons in New York, and Alejandro Barbajosa in Singapore;
Editing by David Gregorio.)
