By Grant Smith Oct. 9 (Bloomberg) -- Crude oil fell as the dollar climbed after Federal Reserve Chairman Ben S. Bernanke said monetary policy may be tightened once the economic outlook has “improved sufficiently.” Oil pared its gains for the week, trading near $71 a barrel as the U.S. currency rose against the yen and the euro, damping the investment appeal of commodities including gold. The International Energy Agency increased its forecast for 2010 global oil demand for a third month, citing a stronger outlook for the world economy. “Over the next two, three weeks, I think we will see a slump in oil, but for this it is necessary that the dollar doesn’t become any weaker,” said Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt. “If you look at inventories, we’re still in an oversupplied situation.” Crude oil for November delivery fell as much as 74 cents, or 1 percent, to $70.95 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $71.35 at 11:43 a.m. London time. Futures are poised to gain 2 percent this week. Yesterday, oil touched $72.55 a barrel, the highest in almost three weeks, after Labor Department data showed initial unemployment benefit applications fell to the lowest since January. Global oil consumption is likely to average 86.1 million barrels a day next year, 350,000 barrels a day more than the IEA previously estimated, the adviser to 28 nations said today in its monthly report. The agency also raised its estimate for consumption this year to 84.6 million barrels a day. ‘Subdued’ “The overall consumption picture in the U.S. remains subdued,” said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. Oil’s “pullback this morning is pretty marginal. Coming off the jump last night, I wouldn’t read too much into that.” The Federal Open Market Committee reiterated its pledge last month to keep the benchmark lending rate near zero “for an extended period” to boost a weak recovery that has yet to create jobs. U.S. unemployment rose to 9.8 percent last month, the highest rate since 1983. The dollar rose to $1.4739 per euro from $1.4794 in New York yesterday after Bernanke’s comments. Fuel Stockpiles U.S. distillate fuel inventories rose 679,000 barrels to 171.8 million last week, an Energy Department report showed Oct. 7. Stockpiles are at their highest since January 1983. Gasoline inventories climbed 2.94 million barrels to 214.4 million as refinery output increased. Oil may decline next week as supply climbs and demand slips, a Bloomberg survey showed. Eleven of 29 analysts and traders, or 38 percent, said futures will drop through Oct. 16. Ten respondents, or 34 percent, forecast the market will rise and eight said prices will be little changed. Brent crude oil for November settlement dropped as much as 77 cents, or 1.1 percent, to $69 a barrel on the London-based ICE Futures Europe exchange. The contract was at $69.52 at 11:27 a.m. in London. Yesterday, it rose 3.8 percent to end the session at $69.77, the biggest gain since Sept. 30.

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