* French strike hits shipping, fuel output, lifts oil
* Early strong dollar weighs, but pared gain supportive
* Coming up: API inventory data at 4:30 p.m. EDT Tuesday
(Recasts, updates prices, market activity, changes byline
and dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Oct 18 (Reuters) - Oil rose sharply on Monday,
pushing above $82 a barrel as refined products futures were
lifted by strikes affecting French shipping and refineries,
which dragged crude oil higher.
The dollar's early strength had pressured oil, but the
greenback's pared gains against the euro <EUR=> and a basket of
currencies <.DXY> added spring to the oil price bounce.
France began to tap emergency fuel reserves as strikes by
refinery and port workers continued and a growing number of
fuel stations began to run dry. []
U.S. crude for November <CLc1> delivery rose $1.43, or 1.8
percent, to $82.68 per barrel by 12:20 p.m. EDT (1620 GMT), its
biggest percentage gain in two weeks. In London, ICE Brent
December crude <LCOc1> rose $1.47, or 1.8 percent, to $83.92 a
barrel.
"Crude is up on the back of products strength due to the
French strike situation," said Addison Armstrong, director of
market research at Tradition Energy in Stamford, Connecticut.
Nationwide strikes over pension reforms have spread to the
country's 12 oil refineries over the past seven days, adding to
the impact of a three-week strike at France's largest oil port,
Fos-Lavera.
"RBOB (gasoline) and heating oil (futures) are up on the
French strike. There is an expectation the U.S. will be
exporting more gasoline and distillate and that cargoes from
Europe will not be coming here," said Phil Flynn, analyst at
PFGBest Research in Chicago.
U.S. gasoline <RBc1> and heating oil futures <HOc1>, the
distillate benchmark, rose 2 percent as the French strikes
continued to hit fuel production in the region.
Crude oil prices fell early on Monday to below $81 a barrel
as the U.S. dollar enjoyed its own bounce, coming back from a
10-month low against a basket of currencies as investors
trimmed bearish bets against the greenback due to uncertainty
over the extent and impact of further monetary easing.
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 program
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," said Christophe Barret, oil analyst at
Credit Agricole.
Oil had moved back above $80 on optimism a boost to the
U.S. economy would improve weak fuel demand but the rally lost
steam at the end of last week and oil finished lower on a
weekly basis.
A Federal Reserve report on Monday showed U.S. industrial
production fell in September, against analyst expectations that
it would rise, while capacity utilization eased slightly.
[]
The Federal Reserve next reviews policy on Nov. 2-3, when
details about any stimulus moves and their implementation might
emerge.
(Additional reporting by Isabel Coles and Joe Brock in London;
Editing by Lisa Shumaker) ((robert.gibbons@thomsonreuters.com;
+1 646 223 6059; Reuters Messaging:
robert.gibbons.reuters.com@reuters.net))
