* Rally on talk of economic stimulus loses steam
* French refinery strikes enter 7th day, supports oil
* Firmer U.S. dollar adds pressure
* Coming Up: U.S. industrial output for Sept; 1315 GMT
(Recasts, adds French refinery strikes)
By Isabel Coles and Joe Brock
LONDON, Oct 18 (Reuters) - Oil hovered near $81 a barrel on
Monday, after earlier hitting its lowest in over a week,
pressured by uncertainty over the U.S. economic outlook and as
the battered dollar rallied.
Federal Reserve chief Ben Bernanke cemented expectations of
more U.S. monetary easing on Friday but his comments lacked
detail, raising doubts over the impact the measures will have on
the economy of the world's largest fuel consumer.
U.S. crude for November <CLc1> fell 10 cents to $81.15 by
1059 GMT, after earlier hitting a session trough of $80.35, the
lowest point since Oct. 8. December ICE Brent <LCOc1> fell 4
cents to $82.41.
Oil pared earlier losses after strikes at France's 12
refineries extended into a 7th day ahead of a nationwide march
scheduled for Tuesday and the final Senate vote on President
Nicolas Sarkozy's unpopular pension reform on Wednesday.
"I think that the only thing that is really supporting
prices for now is the strike at Fos-Lavera that is removing
product out of the market and supporting refinery activity
elsewhere in Europe," said Christophe Barret, oil analyst at
Credit Agricole.
Hundreds of French petrol stations have run out of fuel,
forcing the government to dip into 30-day industry stocks. The
head of the emergency policy division of the IEA said France can
tap its strategic oil stocks without IEA approval if need be.
The U.S. dollar bounced from a 10-month low against a basket
of currencies on Monday, as investors trimmed bearish bets
against the greenback on some uncertainty as to how much easing
the Federal Reserve will implement. <.DXY>
A stronger dollar makes commodities, like oil, more
expensive for buyers using alternative currencies.
U.S. Federal Reserve Chairman Ben Bernanke on Friday offered
his most explicit signal yet that the U.S. central bank was set
to ease monetary policy further in a debt purchase programme
described as a second round of quantitative easing, or QE2.
Oil pierced the upper end of a $70-$80 trading range this
month that had held for much of the last year, on optimism a
boost to the U.S. economy would improve weak fuel demand but the
rally fizzled out at the end of last week.
U.S. ECONOMY
"It looks like we are revising down the possible impact of
QE2 and I think prices will return to the $70-$80 range in the
coming days or weeks," Barret said.
The Fed next reviews policy on Nov. 2-3, when details about
any stimulus moves and their implementation could emerge.
U.S. industrial output numbers will be carefully eyed later
on Monday after data at the end of last week highlighted the
fragile state of recovery in the world's largest economy.
U.S. inflation unexpectedly slowed in September, despite a
pickup in retail sales, the government said on Friday. A survey
showed the country's consumer sentiment unexpectedly dipped in
early October to its weakest level since July. []
The dollar strengthened by almost 0.5 percent against a
basket of currencies on Monday, extending Friday's gains from
10-month lows. Technical indicators pointed to the possibility
of a further short-covering rebound. []
Key oil producer Saudi Arabia is holding a conference in
Riyadh on Monday to mark the 50th anniversary of the
Organization of the Petroleum Exporting Countries (OPEC), which
the kingdom's oil minister Ali al-Naimi is scheduled to attend.
OPEC secretary general Abdullah al-Badri said on Friday that
and oil price between $75-$85 would not hinder global economic
recovery but said the group was concerned about the value of the
dollar. []
(Editing by Keiron Henderson)
