US Light oil prices close below $70 after mixed trading week

US Light crude oil prices fell back on close of trading Friday for the eighth day in a row to settle at $69.87 a barrel on the NYMEX, the first time that US Light oil price has closed below $70 a barrel since early October 2009. Oil prices tumbled as the US dollar gained strength and investors took a second look at paltry demand figures in the West.

The declines came even as the IEA predicted Friday that global oil demand will rise more than previously anticipated next year.Yet it wasn’t the first such report and analysts are now looking for more concrete signs of demand from both consumers and industry. The IEA, an energy watchdog for the biggest crude consuming nations, said it raised its estimates for 2010 global oil demand because of increased economic activity in Asia and the Middle East.

“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 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 US dollar has surged on a drop in US unemployment and an anticipation that the Federal Reserve may raise interest rates. Oil futures contracts, which are priced in US dollars tend to move in the opposite direction of the US dollar.

Tags:  IEA, light oil prices, trading, US dollar