Oil above $98 while dollar weakens (Reuters) (17-01-2011)

SINGAPORE - NYMEX crude fell below $91.20 a barrel but Brent crude was above $98 a barrel for the fourth session on Monday, supported by a brighter economic outlook and a weak dollar.

U.S. crude for February delivery fell 41 cents to $91.13 by 0756 GMT, while Brent March values fell 14 cents to $98.24 a barrel.

The S&P 500 ended a seventh straight week of gains last Friday with a bank-led rally amid healthy volume after encouraging financial results from JPMorgan.

The benchmark Shanghai Composite Indexfell to 2,704.5 points by 11:40 p.m. EST, dropping far below the 125-day moving average at 2,779. The index lost 1.7 percent last week amid lingering fears over monetary tightening steps.

The dollar index versus a basket of currencies remained dangerously near its December low. It stood at 79.40at 12:54 a.m. EST, not far above its December 31 low of 78.775, a break through which could fan expectations for more dollar weakness.

A weaker greenback supports dollar-denominated commodities such as oil, making them cheaper for holders of other currencies.

Although China's total apparent oil demand is expected to be lower than in 2010, growth is still on the increase at 6.2 percent this year to around 9.66 million barrels per day (bpd) versus 11.4 percent last year, based on a forecast from CNPC's research arm.

China is about to add an estimated 24.5 million tonnes, or 490,000 bpd of refining capacity versus last year's addition of 640,000 bpd, citing a company research report.

Money managers, the group containing hedge funds and other speculative investors, raised their net long positions to 195,655 from 175,862 positions in the previous week.

Source: Reuters