* Dollar weakens against basket of currencies
* Cold expected in U.S. heating fuel regions this week
* Iran raises stakes in nuclear dispute
(Updates prices at settlement, adds inventory poll)
By Edward McAllister
NEW YORK, Feb 8 (Reuters) - Oil rose nearly one percent on
Monday, after three sessions of losses, as a weaker U.S.
dollar, cold weather and geopolitical disputes provided
support.
U.S. crude for March delivery <CLc1> rose 70 cents to
$71.89 per barrel. The contract fell as low as $69.50 on
Friday, the lowest since Dec. 15. In London, Brent crude
<LCOc1> rose 52 cents to settle at $70.11.
Unusually cold weather will settle across key heating fuel
consuming regions in the United States this week, in the wake
of heavy snow over the weekend, forecasters said.
[]
The United States and France have threatened carefully
targeted new sanctions against Iran, which gave instructions on
Sunday for the production of higher-grade nuclear reactor fuel.
[]
A Nigerian militant group said on Sunday it had attacked a
Shell <RDSa.L> oil pipeline in the Niger Delta but the company
said it had no reports of any such sabotage.
"The market is following what is going on in Iran and
Nigeria and the cold weather is helping lend support along with
the weaker dollar," said Dan Flynn, analyst at PFGBest Research
in Chicago.
Investors have looked to wider economic data over the past
year for signs of a recovery in the global economy and a
potential rebound in flagging energy demand.
The dollar drifted lower on Monday as a modest recovery in
overseas stock markets enhanced risk appetite and prompted
investors to venture into other higher-yielding currencies.
[]
Over the past year, oil prices have frequently weakened as
the dollar firmed, at times signaling a flight to safer havens
by investors. Conversely, crude prices have often risen as the
dollar has weakened.
Wall Street stocks slipped as the euro zone's debt problems
weighed on sentiment. []
Major commodity markets are testing 200-day moving averages
after sharp sell-offs in the past three weeks, but that
important technical support level appears to have held for U.S.
crude.
"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.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of U.S. crude and the 200-day moving average,
click here:http://link.reuters.com/wyw38h
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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.
According to a preliminary Reuters poll of analysts on
Monday, U.S crude stocks rose by 1.2 million barrels last week,
while distillate stocks fell 1.7 million barrels and gasoline
rose 300,000 barrels. []
(Additional reporting by Robert Gibbons and Gene Ramos in New
York; Alex Lawler in London and Fayen Wong in Perth; Editing by
Marguerita Choy)
