* Dollar gains, U.S. stock markets fall
* France refinery strike enters sixth day
* Chinese refinery processing in Jan rises 29 pct on year
(Recasts, adds quote, updates throughout)
NEW YORK, Feb 22 (Reuters) - Oil rose slightly to over $80
a barrel on Monday as a French refiner strike and tensions over
Iran's nuclear program outweighed gains in the dollar.
Further support came on short-covering ahead of the
expiration of the March U.S. crude oil contract, traders said.
U.S. crude for March delivery <CLc1>, which expires on
Monday, rose 35 cents to $80.16 a barrel by 1:56 EST (1856GMT)
after hitting $80.51 earlier -- the highest for a front-month
contract since Jan. 13. Brent crude <LCOc1> for April rose 37
cents to trade at $78.56 a barrel.
"It looks like there are are some shorts covering at this
point, to liquidate positions ahead of the expiration of the
front-month March contract," said Mark Waggoner, president of
Excel Futures in Newport Beach, California.
The gains 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
escalating concerns about Iran's nuclear program.
French motorists rushed to the pumps on the sixth day of a
Total refinery workers' strike which a union said will close
over half of France's oil refining capacity. []
French Petroleum industry body UFIP said on Monday France
had around 7 days of fuel supply left before it faced a
shortage. The CGT union said output would fully halt at Total's
six refineries by Tuesday.
This will cut over 1 million barrels-per-day (bpd) in
French refinery capacity, out of a total capacity of 2 million
bpd, according to Reuters calculations.
Further support came from news OPEC member Iran has
earmarked potential sites for 10 new nuclear enrichment plants
and construction of two of them could begin this year, a
nuclear energy official said on Monday. []
A Reuters poll of analysts ahead of weekly inventory data
forecast U.S. crude oil stocks rose 1.9 million barrels in the
week to Feb. 19, while distillate stocks were seen falling.
[]
Data from No. 2 oil 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.
[]
Oil's gains came even as 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. []
A rise in the dollar can depress oil and other commodities
priced in the greenback by making them more expensive for
holders of other currencies.
U.S. stocks fell slightly on investor uncertainty about the
Federal Reserve's intentions after last week's increase in the
interest rate for emergency loans to banks. []
Analysts said oil inventories at sea, which rose last year
due to weak fuel 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.
(Reporting by Robert Gibbons, Gene Ramos, Matthew Robinson in
New York; Alex Lawler in London; Fayen Wong in Perth; Editing
by Rebekah Kebede)
