LONDON: Oil prices steadied below $75 a barrel on Monday, after slipping towards a one-month low on continued market unease over possible tighter Chinese monetary policy and a US proposal to toughen bank trading rules. Prices have fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on Jan. 11. Wall Street stocks had their worst three-day slide in 10 months at the end of last week on fears President Barack Obama s plan to limit risk-taking by banks would undermine profits, but US stock index futures pointed to a possible rebound. At the end of last week, commodities were pressured after President Obama announced plans to curb risk-taking on Wall Street by limiting trading activity of financial institutions and banning commercial banks from proprietary activity, JBC Energy analyst David Wech said. Besides raising concerns that the new ruling could threaten the profitability of the financial sector, Obama s plan also raised worries concerning liquidity in commodity markets. US crude for March delivery rose 23 cents to $74.77 a barrel by 1059 GMT. The contract fell $1.54 to settle at $74.54 a barrel on Friday, the lowest settlement since Dec. 22, after trading as low as $74.01. London ICE Brent rose 51 cents to $73.34. Oil prices have broken below the 100-day moving average of $75.25, a key indicator of market sentiment which measures the average price of oil over the last three months. Demand for oil remains relatively weak in the wake of the financial crisis. US crude oil is expected to rise to an average of $77.50 a barrel in 2010, a Reuters poll of 29 market analysts showed on Monday. Analysts said sentiment during the week would be shaped by the latest US Federal Reserve comments on interest rates due on Wednesday as well as US existing home sales data and gross domestic product for the fourth quarter. China, the fastest growing oil market and the world s second largest energy consumer, is in focus, with signs Beijing could move to tighten monetary policy to rein in its booming economy. European equity markets edged higher on Monday. Having fallen in seven out of eight trading sessions since Jan 11, oil prices could see some support near current levels, analysts said. More bearish news could push the price toward a low of $68.59 - last seen in late December. Oil spill An oil spill in Texas, following a collision between an oil tanker and a barge in the Sabine-Neche Waterway, is blocking seaborne supplies to four Texas refineries representing 6.5 percent of US capacity. Texas officials said the clean-up of the 11,000 barrels of oil is underway. The spill is the biggest in Texas since 1991. Separately, Mexico closed its Dos Bocas oil terminal on Sunday due to bad weather, the government said. Almost all of Mexico s crude oil exports are shipped to refineries on the Gulf Coast of the United States. Money managers boosted their net long crude oil futures positions - bets prices will rise - on the New York Mercantile Exchange in the week through Jan. 19, the Commodity Futures Trading Commission (CFTC) said on Friday. But some analysts cautioned this could actually lead to lower prices. The latest CFTC net non-commercial position reports reveal that there has hardly been any retrenchment in length this past week in crude oil or gasoline, implying that further selling could easily come our way if many of the stale longs start heading for the sidelines, MF Global analyst Edward Meir said. -Additional reporting by Gwladys Fouche in London and Fayen Wong in Perth
