* Investors flock to perceived safety of dollar
* U.S. consumer spending up in January
* Traders focus on key U.S. jobs data this week
(Updates prices, adds comment)
By Chris Baldwin
LONDON, March 1 (Reuters) - Oil resumed a rally above $80 a
barrel on Monday as a significant sell-off in sterling spooked
currency markets, prompting a knee-jerk drop in the single
European currency versus the dollar.
U.S. crude for April delivery <CLc1> rose 45 cents to $80.11
by 1448 GMT, after having climbed by as much as 96 cents. On
Friday, the contract settled up $1.49 at $79.66 and posted its
biggest monthly percentage gain since May 2009.
London Brent crude <LCOc1> rose 51 cents to $78.10.
"We're steadily going back up again, focused mostly on the
dollar strength," said broker Rob Montefusco at Sucden
Financial.
Commodities priced in U.S. dollars tend to become more
expensive for holders of other currencies if the dollar
strengthens.
In early trade, sterling shed well over one percent against
the dollar and the euro after a poll showed a growing risk that
no party will win a majority in an election due by June 3.
[][]
The British currency was on track for its largest one-day
fall against the dollar since February 2009, while gold priced
in sterling <XAUGBP=R> hit record highs.
"Because these markets are all so correlated ... they have
all become traders' markets, and not investors' markets, and
it's always with an eye on the dollar," said analyst David
Morrison at GFT Global.
The dollar rose by almost 1 percent against a basket of
major currencies.<.DXY>
COPPER COMMODITY
Oil rallied earlier on a combination of bullish sentiment
and a rise in the price of copper futures following a massive
earthquake on Saturday in Chile, the top producer of the
industrially indispensable metal. []
Chile's state energy company ENAP said it was boosting
diesel imports after two of its oil refineries -- Aconcagua and
Bio Bio with a combined capacity of 220,000 barrels per day --
were damaged in Saturday's quake.
"Although these volumes are not large in a global context,
this disruption is just another to add to a series of oil supply
disruptions that have occurred recently, again, potentially
hastening the tightening in oil fundamentals that has already
begun," analysts at Goldman Sachs wrote in its Commodities
Update.
On Sunday a senior military official from Iran, the world's
fourth-largest exporter of crude, said the country could make
European nations suffer by cutting off energy supplies and could
target any adversary with its missiles. []
Iran is disputing its nuclear energy programme with the
United States and its allies, who say it is aimed at developing
weapons. Tehran says it is only interested in power generation
and medical research.
Oil traders will look to economic reports this week, with
key focus on U.S. jobless data on Friday, that should give more
clues on consumer spending.
Other economic indicators due include U.S. manufacturing on
Monday and U.S. home loans on Wednesday.
Positive economic data on Friday from the United States,
which saw the world's largest economy grow faster in the fourth
quarter than initially thought, also helped increase investors'
appetite for more risky assets, lending further support to oil.
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
