Oil falls on Greece deal doubts, lower IEA demand view

Oil prices slipped on Friday, after an eight-day rally for Brent crude, as the latest hitches in negotiations on a Greece bailout package pressured the euro and equities.

A lowered oil demand growth forecast from the International Energy Agency (IEA), the sixth consecutive monthly report with a diminished growth expectations, also provided pressure on oil.

The euro fell and the dollar index strengthened after the leader of the far-right party in Greece's coalition declined to back a bailout agreement, raising concerns once again about the risk of a default.

The euro had been pressured earlier after euro zone finance ministers sought further measures from Greece before signing off on a 130 billion euro ($171.46 billion) bailout package.

Both Brent and U.S. crude remained on track to post a weekly gain.

Brent March crude futures fell $1.15 to $117.44 a barrel by 11:23 a.m. EST (1623 GMT), having fallen as low as $116.29. The pull back follows Brent's close at $118.59 on Thursday, its highest settlement since late July.

U.S. March crude, after three consecutive higher settlements, was down $1.20 at $98.64 a barrel, having fallen as low as $97.32. U.S. crude needs to close above $97.84 to end higher on the week.

A retreat ahead of the weekend, after the sharp rise in Brent prices over the past eight sessions, was not unexpected after its Relative Strength Index pushed above 70 this week, signaling an overbought condition for investors watching technical indicators.

"The market has paused for breath after its sustained rally," Mark Thomas, head of European energy at brokerage Marex Spectron in London, said.

IEA TRIMS DEMAND GROWTH VIEW

Global oil demand will grow by less than 1 percent in 2012, the IEA said in its monthly oil report.

The agency, which provides energy advice to the world's most industrialized nations, cut its 2012 global oil demand growth forecast by 250,000 barrels per day (bpd) to 800,000 bpd. ($1 = 0.7582 euros) (Additional reporting by Gene Ramos in New York, Ikuko Kurahone in London and Francis Kan in Singapore; Editing by Marguerita Choy)

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