* Oil's slide Friday to lowest since Dec. 15 seen overdone
* U.S. mid-Atlantic hit by blizzard
* Iran raises stakes in nuclear dispute
(Updates prices, adds quote paragraph 4, link to graphic)
By Alex Lawler
LONDON, Feb 8 (Reuters) - Oil held above $71 a barrel on
Monday, supported by a weaker U.S. dollar and as some investors
viewed the previous session's decline to a near two-month low as
a buying opportunity.
Metals including copper and gold also rose, although
European shares turned negative after an earlier rally as
banking stocks were dragged down by worries over euro zone
sovereign debt problems.
U.S. crude for March <CLc1> was up 38 cents at $71.57 a
barrel by 1139 GMT. The contract fell as low as $69.50 on
Friday, the lowest since Dec. 15. Brent crude <LCOc1> rose 36
cents to $69.95.
"We dipped below $70 on Friday, which is the bottom of the
recent trading range, and some used that as a buying
opportunity," said Carsten Fritsch, analyst at Commerzbank,
referring to U.S. crude.
"Given weak fundamentals and doubts about economic recovery,
it's only a matter of time before prices start heading lower
again."
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 also lent
support to prices.
The U.S. dollar was weaker against a basket of currencies
<.DXY>. Dollar weakness makes crude and other dollar-priced
commodities cheaper for holders of other currencies, and tends
to support oil prices.
Major commodity markets are testing 200-day moving averages
after sharp sell-offs in the past three weeks, but that
important support level appears to have held for U.S. crude, as
well as copper and gold.
"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.
"However, most charts still look precarious and at best,
rallies could return values back over broken trend lines with
little assurance that these gains will be sustained."
For a graphic of U.S. crude and the 200-day moving average,
click here:
http://graphics.thomsonreuters.com/gfx/NTrv_20100802184556.jpg
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 United States and Germany have threatened carefully
targeted new sanctions against Iran, which gave instructions on
Sunday for the production of higher-grade nuclear reactor fuel.
[]
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.
(Additional reporting by Fayen Wong in Perth; Editing by Amanda
Cooper)
