Oil falls below $70
Prices fall 10% over the last eight days as the dollar firms against rival currencies. Selloff comes despite strong economic data from the United States and China.
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NEW YORK (Reuters) -- Oil fell for the eighth consecutive session Friday, edging below $70 a barrel as a stronger dollar pressured prices, outweighing positive economic data from the United States and China.
Crude for January delivery fell 67 cents to settle at $69.87 a barrel. Over the past seven trading days, front month crude has sunk almost $7, or 10%.
An eight-day losing streak would match a slide in prices last seen in October 2003, according to Reuters data.
The U.S. dollar rallied Friday, boosted by higher-than-expected U.S. retail sales in November. A stronger dollar induces investors to sell off commodity positions and tends to pressure crude prices.
"The dollar's strength is overwhelming other inputs. Energy prices seemed to benefit the most from the dollar's weakness all year, and now it's payback time," said John Kilduff, partner at Round Earth Capital in New York.
This quarter, some investors have been shifting money out of the sinking dollar and into tangible assets such as oil and gold, and this helped to support oil in a band between $75 and $82 a barrel in October and November.
But prices broke below this range earlier this week, leaving a more uncertain outlook for crude.
Investors have looked to wider economic data this year for signs of economic recovery and a potential rebound in energy demand.
Stocks pared gains Friday, pressured by strength in the dollar, while declines in shares of large cap technology companies dragged the Nasdaq into negative territory.
Consumers stepped up their spending in November and grew optimistic this month, unexpectedly strong data showed on Friday.
Earlier, a forecast from the International Energy Agency (IEA) showed that world oil demand will rise by almost 1.5 million barrels per day (bpd) in 2010 to 86.3 million bpd, and that the rate of demand growth will also accelerate.
The report came after the U.S. Energy Information Administration revised down its own world oil demand forecast for 2010 on Tuesday.
Strong industrial growth figures out of China had earlier supported prices.
China's November industrial output surged to its strongest since June 2007, underscoring the economy's robust recovery from the global downturn, and analysts expected the trend to continue in coming months.
For now, analysts are citing $70 a barrel as a key support level but say oversupply could push prices lower in the medium term.
Earlier this week, the EIA reported stocks at the U.S. delivery hub of Cushing in Oklahoma rose 2.5 million barrels to 33.4 million barrels.
This inventory overhang has depressed front-month U.S. crude prices relative to oil futures, resulting this week in the widest WTI crude market contango since August of more than $2 a barrel.
"There is a strong message in the oil market and that is weakness. The contango is widening significantly and this points to physical oversupply," said analyst David Wech at JBC Energy, referring to both inventories on land and in floating storage.
Distillate and gasoline stocks rose last week, despite cold weather, as supply remained ample versus demand.
The volume of refined oil products stored on ships floating in the sea increased to 98 million barrels at the end of November, the IEA said on Friday. 
