Oil up 1 percent on geopolitics, dollar and cold

By Edward McAllister

NEW YORK (BestGrowthStock) – Oil rose nearly one percent on Monday, after three sessions of losses, as a weaker U.S. dollar, cold weather and geopolitical disputes provided support.

U.S. crude for March delivery rose 70 cents to $71.89 per barrel. The contract fell as low as $69.50 on Friday, the lowest since December 15. In London, Brent crude rose 52 cents to settle at $70.11.

The United States and France have threatened carefully targeted new sanctions against Iran, which gave instructions on Sunday for the production of higher-grade nuclear reactor fuel.

A Nigerian militant group said on Sunday it had attacked a Shell (RDSa.L: ) oil pipeline in the Niger Delta but the company said it had no reports of any such sabotage.

“The market is following what is going on in Iran and Nigeria and the cold weather is helping lend support along with the weaker dollar,” said Dan Flynn, analyst at PFGBest Research in Chicago.

Investors have looked to wider economic data over the past year for signs of a recovery in the global economy and a potential rebound in flagging energy demand.

The dollar drifted lower on Monday as a modest recovery in overseas stock markets enhanced risk appetite and prompted investors to venture into other higher-yielding currencies.

Over the past year, oil prices have frequently weakened as the dollar firmed, at times signaling a flight to safer havens by investors. Conversely, crude prices have often risen as the dollar has weakened.

Wall Street stocks slipped as the euro zone’s debt problems weighed on sentiment. (.N: )

Major commodity markets are testing 200-day moving averages after sharp sell-offs in the past three weeks, but that important technical support level appears to have held for U.S. crude.

“For now, we would venture to say that a measure of stability could be with us over the next day or two,” said Edward Meir, analyst at MF Global, in a report.

Oil fell 2.7 percent on Friday as a tepid employment report in the United States, the world’s top energy consumer, heightened worries of a sluggish recovery in fuel demand. It has lost nearly 10 percent this year.

According to a preliminary Reuters poll of analysts on Monday, U.S. crude stocks rose by 1.2 million barrels last week, while distillate stocks fell 1.7 million barrels and gasoline rose 300,000 barrels.

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(Additional reporting by Robert Gibbons and Gene Ramos in New York; Alex Lawler in London and Fayen Wong in Perth; Editing by Marguerita Choy)

Oil up 1 percent on geopolitics, dollar and cold