Oil slips from six-week high as dollar rises

NEW YORK (BestGrowthStock) – Oil slipped from six-week highs on Monday as economic concerns sent investors into safer havens such as the dollar.

The dollar edged up against the euro as markets remained anxious about unresolved debt problems in Greece and a surprise rise in the Federal Reserve’s emergency lending rate. U.S. stock markets fell. (.N: )

U.S. crude for March delivery, which expires on Monday, fell 7 cents to $79.74 a barrel by 11:24 EST (1624 GMT) after hitting $80.51 earlier — the highest for a front-month contract since January 13. Brent crude for April gave up 6 cents to trade at $78.13 a barrel.

The losses came after U.S. crude surged 7.7 percent last week, the largest single-week percentage gain since October, finding support from a strike by refiners in France and tensions over Iran’s nuclear program.

OPEC member Iran has earmarked potential sites for new nuclear enrichment plants and construction of two of them could begin this year, a nuclear energy official said on Monday.

Workers at Total’s French refineries continued strike action, raising concern about fuel supplies and supporting the price of refined products such as gasoil. Talks broke down on Sunday between Total and workers protesting against the possible closure of the company’s Dunkirk refinery in northern France.

The 339,000 barrel-per-day Gonfreville refinery will halt production fully late on Tuesday due to the strike, the CGT union said. Four other Total refineries are in the process of halting production.

Data from No. 2 consumer China showed strong demand growth last month. The China Petroleum and Chemical Industry Association (CPCIA) said China processed 30.14 million tonnes of crude in January, up 29 percent from a year earlier.

Analysts said oil inventories at sea, which rose last year due to the weak demand, may be falling.

Societe Generale, in a note dated Friday, said preliminary inventory data for the United States, Japan and Europe, as well as short-term floating storage, showed a 2.17 million barrel-per-day decline in crude and refined products stocks in the first half of February.

“Stock movements — building in January and falling sharply in February so far, also neatly explain the price action,” Societe Generale’s Michael Wittner said, referring to the rally in prices over the past week.

Some think the rally has further to run. Goldman Sachs said that benchmark oil prices will rise to $85 to $95 a barrel this year as global economic growth accelerates.

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(Reporting by Robert Gibbons, Gene Ramos, Matthew Robinson in New York; Alex Lawler in London; Fayen Wong in Perth; Editing by Lisa Shumaker)

Oil slips from six-week high as dollar rises