Oil prices slipped slightly on Monday to approach a one-month low near $74 a barrel on continuing signs of weak demand and concerns over a U.S. proposal to tighten bank trading rules.

Prices have fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on January 11.

U.S. crude for March delivery fell 20 cents to $74.34 a barrel by 1510 GMT. The contract fell $1.54 to settle at $74.54 a barrel on Friday, the lowest settlement since December 22, after trading as low as $74.01.

London ICE Brent rose 9 cents to $72.92.

It is very narrow trading today. You could call it consolidation after last week's fall, VTB Capital analyst Andrey Krynchenkov said.

It is quiet ahead of the U.S. Federal Reserve announcement on interest rates on Wednesday, he added.

Wall Street stocks had their worst three-day slide in 10 months at the end of last week on fears President Barack Obama's plan to limit risk-taking by banks would undermine profits. Stocks were mixed on Monday as a bounce was stymied by a report showing U.S. home sales fell sharply in December.

Besides raising concerns that the new ruling could threaten the profitability of the financial sector, Obama's plan also raised worries concerning liquidity in commodity markets, JBC Energy analyst David Wech said.

Oil prices have broken below the 100-day moving average around $75.25, a key indicator of market sentiment which measures the average price of oil over the last three months.


Demand for oil remains relatively weak in the wake of the financial crisis.

U.S. crude oil is expected to rise to an average of $77.50 a barrel in 2010, a Reuters poll of 29 market analysts showed on Monday.

Analysts said sentiment during the week will be shaped by the U.S. Federal Reserve's comments on interest rates due on Wednesday.

The dollar was broadly weaker on Monday. A weak dollar tends to support commodities priced in dollars as they become cheaper for holders of other currencies.

Having fallen in seven out of eight trading sessions since Jan 11, oil prices could see some support near current levels, analysts said. More bearish news could push the price toward a low of $68.59 -- last seen in late December.

An oil spill in Texas, following a collision between an oil tanker and a barge in the Sabine-Neche Waterway, blocked seaborne supplies to four Texas refineries representing 6.5 percent of U.S. capacity.

Texas officials said the clean-up of the 11,000 barrels of oil was underway. The spill is the biggest in Texas since 1991.

Separately, Mexico closed its Dos Bocas oil terminal on Sunday due to bad weather, the government said. Almost all of Mexico's crude oil exports are shipped to refineries on the Gulf Coast of the United States.

(Additional reporting by Fayen Wong in Perth; Editing by William Hardy)