UPDATE 13-Oil falls as weak German data weighs on outlook

Reuters Middle East

* German Ifo index falls for fifth month in a row

* Nigerian oil exports to hit 6-month peak in November

* Iran, Israel sabre-rattling keeps markets on edge

* Coming up: API oil data 4:30 p.m. EDT Tuesday

(Adds details on poll of analysts for weekly US inventory data,

final two paragraphs)

By Robert Gibbons

NEW YORK, Sept 24 (Reuters) - Oil prices fell more than 1

percent on Monday, dragged by disappointing German economic

data that reinforced concerns about the global economy and the

outlook for fuel demand.

German business sentiment dropped in September for the fifth

straight month, raising fears of recession as companies

struggled with what an economist for the Munich-based Ifo

institute called the worst economic outlook since

mid-2009.

Oil markets have been balancing the fragile economic outlook

against output problems in the North Sea the possibility

geopolitical instability could hit production in recent weeks.

The weak data from Europe's biggest economy came as traders

considered the impact of a third round of quantitative easing

announced by the U.S. Federal Reserve this month. Prior rounds

of stimulus have pushed investors into riskier asset classes,

including commodities.

"Ever since the Fed announced QE3, the market has started

to come under pressure as the stimulus seems to not be the

juggernaut people thought it would be beforehand." said Gene

McGillian, analyst at Tradition Energy in Stamford, Connecticut.

He said data from Germany and worries about growth in China --

the world's No. 2 oil consumer -- added to pressure on Monday.

Brent November crude fell $1.61 to settle at $109.81

a barrel having dropped as low as $108.78. Support could be

tested Brent's six-week low of $107.10 hit last Thursday and

below that at the 100-day moving average of $106.38 if the slide

continues.

U.S. November crude retreated 96 cents to settle at

$91.93 a barrel, after dipping as low as $91.06.

As Brent fell more sharply that U.S. futures, the

international benchmark's premium to U.S. crude fell

below $18 a barrel.

In the final week of September, Brent is on pace to post a

12 percent third-quarter gain after a 20.4 percent

second-quarter plunge. U.S. crude is on track for an 8 percent

gain, after dropping 17.5 percent in the second quarter.

The day's total crude futures trading volumes were tepid,

with Brent dealings outpacing U.S. crude volume, as turnover for

both lagged their 30-day averages.

U.S. October heating oil and RBOB gasoline

futures settled almost 1 percent lower. The October contracts

expire on Friday.

U.S. equities extended last week's decline on the weak

German data and the concerns about the euro zone, which also

weighed on the wider commodity complex.

SUPPLY CONCERNS

Oil markets have been closely watching the ongoing standoff

between Iran and the West over Tehran's nuclear program and the

impact on oil supplies.

On Monday, Washington tightened sanctions aimed at curbing

the OPEC member country's nuclear ambitions, linking Iran's

state oil company to its Islamic Revolutionary Guard Corps. The

move will allow apply new sanctions on foreign banks dealing

with the company.

As world leaders gathered at the United Nations in New York

ahead of the annual General Assembly, Iranian President Mahmoud

Ahmadinejad declared that Israel has no roots in the Middle East

and would be "eliminated."

In addition, oil markets have been watching delays in North

Sea crude loadings due to seasonal maintenance.

Countering concerns about supply interruptions elsewhere,

Nigeria's crude oil exports are expected to hit a six-month high

in November as almost all its oil fields pump near recent peak

levels, provisional loading programs showed.

Traders were also awaiting weekly U.S. inventory data from

the American Petroleum Institute and the U.S. Energy Information

Administration for the latest update of stockpiles in the

world's top energy consumer, due out on Tuesday and Wednesday,

respectively.

A Reuters poll of analysts released Monday forecast a 1.4

million barrel build in crude inventories for the week to Sept.

21, with gasoline and distillate stockpiles also expected to

show modest increases.

(Additional reporting by Adam Kerlin in New York; Christopher

Johnson in London and Ramya Venugopal in Singapore; Editing by

David Gregorio, Sofina Mirza-Reid, Steve Orlofsky, Gary Hill)

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