* U.S. mid-Atlantic hit by blizzard
* Iran ratchets up atom work despite sanctions threat
* G7 reassures on Greece, talks tough on banks
(Recasts, updates prices, adds analyst's comments)
By Fayen Wong
PERTH, Feb 8 (Reuters) - Oil prices hovered near a
seven-week low of about $71 a barrel on Monday as fears about
an escalating euro zone debt crisis continued to cast a pall on
the market.
However, a cold snap in the U.S. mid-Atlantic region, an
area heavily dependent on home heating oil and natural gas
supplies, and escalating tensions between Iran and western
nations continued to support prices.
U.S. crude for March delivery <CLc1> dipped 10 cents to
$71.09 a barrel by 0741 GMT. The contract settled down $1.95 at
a seven-week low of $71.19 per barrel on Friday.
London Brent crude <LCOc1> slipped 12 cents to $69.47.
"Geopolitical tension, ongoing financial risks from Greece,
Portugal and Spain and further liquidation of speculative long
positions will continue to weigh on the oil price in the longer
term," said Mark Pervan, head of commodity research at
Australia & New Zealand Bank.
A blizzard dumped 2 ft (0.5m) of snow across much of the
U.S. mid-Atlantic on Saturday, threatening record snowfall and
leaving tens of thousands without power. []
"The cold weather in the United States is offering some
support, although people may be less hopeful about a
weather-related fuel demand spike after having seen bearish
U.S. crude inventory reports the past few weeks," said Ben
Westmore, a commodities analyst at the National Australia Bank.
Analysts said heightened tensions between Iran and western
nations also lent some support to oil prices, which had fallen
for four consecutive weeks.
Iran's President Mahmoud Ahmadinejad gave instructions on
Sunday for the production of higher-grade nuclear reactor fuel,
prompting the United States and Germany to threaten carefully
targeted new sanctions against Tehran. []
Crude prices fell 2.7 percent on Friday as a tepid
employment report in the United States, the world's top energy
consumer, again heightened worries of a sluggish recovery in
fuel demand.
Oil prices have lost nearly 10 percent this year, dragged
down by data showing bulging fuel stockpiles in the U.S.
despite cold weather, concerns about slower Asian demand if
China further tightens its monetary policy, and more recently
jitters about Europe's financial system.
Despite a better-than-expected finish on Wall Street, most
Asian stocks fell on Monday, as anxiety over fiscal problems in
Europe lingered despite the assurances European finance
ministers gave to their Group of Seven counterparts this
weekend that the euro zone's debt crisis is under control.
[] []
Analysts said oil prices are likely to remain volatile this
week, as movements in the U.S. dollar and developments on
Europe's fiscal problems remain as the key focal points.
U.S. stocks face more turbulence that could send indexes
spiralling through key levels this week as doubts about the
global recovery's pace persist and fears linger over Europe's
sovereign debt woes. []
Separately, money managers cut their net long crude oil
futures position on the New York Mercantile Exchange in the
week through Feb. 2, the Commodity Futures Trading Commission
said on Friday. []
(Editing by Clarence Fernandez, Himani Sarkar)
