A nine-month rally in oil prices could be faltering as a gradual sell-off that began in late October gains momentum, according to AP. Crude prices, which doubled from March to October, tumbled Friday for the eighth day in a row. The contract for January delivery gave up 74 cents to $69.80 on the New York Mercantile Exchange. Prices hit two-month lows and the dollar gained strength and investors took a second look at paltry demand figures in the West. All energy prices were in retreat despite a report Friday from the International Energy Agency saying global oil demand will rise next year more than previously expected. Analysts said they"ve heard such talk before, and they"re now looking for concrete signs of demand from both consumers and industry. «How do you know when the economic recovery really begins? It is when real oil demand growth appears,» analyst Phil Flynn said in a report. «Not just artificial demand growth being propped up with smoke and mirrors, but demand growth that comes with solid economic activity and global growth.» The IEA, an energy watchdog for some of the biggest crude consuming nations, said Friday that it was raising its estimates for 2010 global oil demand because of increased economic activity in Asia and the Middle East. The Paris-based organization said in its monthly report that crude demand would reach 86.3 million barrels a day in 2010, up 1.7 percent from 2009. Last month, the IEA forecast oil demand of 86.2 million barrels a day in 2010. Meanwhile, the dollar has surged on a drop in U.S. unemployment and an anticipation that the federal government may raise interest rates. Oil contracts, which are priced in U.S. currency, tend to move in the opposite direction of the dollar. Crude had jumped as high as $82 a barrel in October. Since then, oil prices have slumped 13 percent. U.S. consumption of petroleum products including heating oil and diesel, has fallen about 20 percent from a year earlier, Barclays Capital said in a report. «It is really the lack of inspiration in distillate demand that stands out, showcasing the lack of cold weather and no turnaround yet in trucking activity in the U.S.,» Barclays said. In other Nymex trading in January contracts, heating oil fell less than a penny to $1.9016 a gallon while gasoline gave up 1.3 cents to $1.822 a gallon. Natural gas fell less than a penny to $5.294 per 1,000 cubic feet. In London, Brent crude for January delivery lost 53 cents to $71.33 on the ICE Futures exchange.
