Oil continues slide, dips below $69

Oil fell for the ninth straight session as traders weighed weak fuel demand against gains in the stock market.

The market rebounded from early losses after Abu Dhabi bailed out Dubai with $10 billion in surprise aid for Dubai World, which boosted stock markets as risk appetite improved and eased fears of a potential debt default.

Crude for January delivery fell 10 cents to $69.77 a barrel by 12:20 p.m. EST (1720 GMT), after falling as low as $68.59 earlier in the session, the weakest since Oct. 5. Brent crude traded up 31 cents to $72.19 a barrel.

Analysts, who watch past price moves for future direction, have been saying a move below $70 for US crude could trigger further losses since ther,e is little strong technical support until around $65 a barrel.

``The losing streak culminating on Friday has been the longest one since a nine-day slide in July 2001, and has also turned the chart patterns distinctly negative,'' said Edward Meir, analyst at MF Global.

``The question now becomes where we head from here, and from the looks of things, we suspect there is more downside to go.''

If the US crude contract settles down on Monday, that would match the nine-day losing streak in July 2001. Crude is up from below $33 in December 2008, but is still less than half its July 2008 record high of more than $147.

Concern about a sluggish recovery in global fuel demand, along with high stockpiles in the United States, has pressured crude prices.

In particular, stocks at Cushing, the delivery point for NYMEX WTI crude futures, have swelled by 7.8 million barrels in the last six weeks to 33.4 million barrels, putting pressure on the nearby month.

One item high on investors' radar this week is the US Federal Reserve's monetary policy decision to be announced on Wednesday. Rates are expected to stay unchanged at near zero.

Ministers from the Organisation of the Petroleum Exporting Countries say the group is likely to hold its output targets steady at a Dec. 22 meeting. Opec has unofficially been putting more oil on the market since April as prices rallied.

Keeping targets steady at the meeting in Angola would allow Opec to continue to make unofficial adjustments in supply depending on the pace of economic recovery and prices next year.

- Reuters