* Rally on talk of economic stimulus loses steam
* French refinery strikes enter 7th day, supports oil
* Firmer U.S. dollar adds pressure
(Updates throughout)
By Isabel Coles and Joe Brock
LONDON, Oct 18 (Reuters) - Oil rose towards $82 a barrel on
Monday, after earlier hitting its lowest in over a week, as
strikes at French refineries made up for losses wrought by a
rallying dollar and doubts over the U.S. economic outlook.
The week-old action, which has brought operations at
France's 12 refineries to a near-standstill, lifted refined
products futures and in turn sent crude oil prices up,
offsetting the effects of a stronger dollar. []
U.S. crude for November <CLc1> up 61 cents to $81.86 by
1402 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.
"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.
He was referring to a Mediterranean oil hub which has been
blocked for 3 weeks by a protest against pension reform.
Oil defied a bounce in the U.S. dollar, which came back
from a 10-month low against a basket of currencies on Monday as
investors trimmed bearish bets against the greenback due to
uncertainty over the extent and impact of further monetary
easing. <.DXY>.
U.S. Federal Reserve Chairman Ben Bernanke on Friday gave
his most explicit signal yet that the U.S. central bank was set
to loosen monetary policy further in a debt purchase programme
described as a second round of quantitative easing, or QE2, but
he gave no details about the Fed's next step.
"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.
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.
The Fed next reviews policy on Nov. 2-3, when details about
any stimulus moves and their implementation could emerge.
U.S. industrial production unexpectedly fell in September,
while capacity utilization eased slightly, according to a report
on Monday that supported expectations of further monetary easing
next month. []
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)
