Oil falls as demand worries outweigh Fed optimism

17-Sep (Reuters) – Oil fell on Monday in light trade, pausing after seven straight sessions of gains, as concerns about weak demand outweighed the expectations the U.S. Federal Reserve stimulus plan would boost commodity investment.

U.S. gasoline futures led the oil complex lower, dropping more than 1 percent, while Brent crude dropped more than $1 after the front-month contract posted a four-month high in intraday activity near $118 a barrel on Friday.

Traders said the market eased after last week’s run up, which was fueled by the third round of quantitative easing (QE3) announced by the Federal Reverse on Thursday and by rising concerns about anti-Western unrest in the Middle East and North Africa spurred by a film mocking the Prophet Mohammad.

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PG View: The sell-off in crude has weighed on gold intraday, but downticks in the yellow metal already seem to be attracting buying interest.