* U.S. Nov. output, API weekly oil inventory data due later
* Federal Reserve monetary policy expected Wednesday
* Dollar stronger vs. euro, currency basket
(Updates prices, adds comment)
By Chris Baldwin
LONDON, Dec 15 (Reuters) - Oil rose above $70 a barrel on
Tuesday after falling for nine straight days, the longest
continuous decline in eight years, as traders said cold weather
was supporting prices.
U.S. crude for January delivery <CLc1> rose $1.16 to $70.67
a barrel by 1500 GMT. London Brent <LCOc1> was up 68 cents at
$72.57.
"We found some support at $70.50, but a lot of it is down to
cold weather, because oil is not getting a lot of support from
other markets," said Christopher Bellew at Bache Financial.
In the United States the National Weather Service predicted
below-normal temperatures for most of the eastern half of the
country, the world's leading heating oil market, over the next
two weeks. []
The dollar hit a 2-1/2 month high against the euro on
Tuesday and rallied to a six-week high versus a currency basket
as questions surrounding the fiscal positions of euro zone
states also curbed risk demand and prompted short covering in
the U.S. currency. [] []
Dollar weakness had boosted dollar-priced commodities in
recent months as they became cheaper for those holding other
currencies.
OPEC OUTPUT
OPEC slightly raised its forecast for world oil demand
growth in 2010 to average 85.1 million bpd, up by a mere 70,000
bpd from its calculations last month. []
Reuters calculations showed OPEC production target
compliance slipping to 58 percent in November from 60 percent in
October.
"It's not surprising that at current prices countries are
looking to rethink," said commodity analyst Eugen Weinberg at
Commerzbank.
Oil was trading as high as $82 a barrel as recently as
October, and has come up from lows around $33 a barrel since
February. In July, 2008 U.S. crude touched an all-time high of
$147.27.
"What producer countries can do in their budgets at $40 (a
barrel) is a lot different from what they can do when it's at
$80," Weinberg said.
On Tuesday traders were awaiting a weekly American Petroleum
Institute (API) report to see if inventories continue to rise,
and November industrial output figures to examine the vital
signs of the world's largest economy. []
A U.S. Federal Reserve's monetary policy decision due
Wednesday will also be closely watched as interest rates are
expected to stay unchanged at near zero, but comments will be
analysed for clues on when the Fed may start tightening policy.
(Additional reporting by Jennifer Tan in Singapore, editing
by William Hardy)
