* Oil falls $1,

* Oil falls $1,

* Oil falls $1, extending Fri sell-off as dollar rebounds
* Questions about demand recovery cast shadow over commods
* Investors wait for stocks to drain, consumption to recover (Updates prices, adds details)
By Osamu Tsukimori

TOKYO, Sept 14 (Reuters) - Oil fell more than a dollar toward $68 a barrel on Monday as a rebound in the beaten-down U.S. dollar and nagging concerns that prices may have run ahead of market fundamentals extended last week's late sell-off.
The U.S. currency rallied sharply against a basket of currencies as investors covered short positions following last week's slide of 2 percent to its lowest in a year, fuelled by funds flowing into riskier assets such as stocks and commodities and a drop in U.S. Treasury yields.