* Dollar jumps to around 1.355 to euro from almost 1.37
* U.S. crude oil stocks expected to rise
* French refinery strike enters seventh day
(Recasts throughout, updates prices, detail)
By Ikuko Kurahone
LONDON, Feb 23 (Reuters) - Oil fell more than $1 per barrel
to below $79 on Tuesday, breaking a five-day rally, after the
dollar jumped against the euro and on expectations of a build in
U.S. crude oil stocks.
The dollar rose rapidly against the euro to around 1.355 to
the European single currency from closer to 1.37 after Germany's
Ifo business sentiment index fell unexpectedly, raising
questions over the health of Europe's biggest economy. []
The swift rise in the U.S. currency ahead of testimony by
Federal Reserve Chairman Ben Bernanke also dented other
commodities such as gold <XAU=>.
The market was also on edge ahead of data on U.S. oil
stocks, which a Reuters poll suggested would show a rise of 1.9
million barrels in crude oil inventories, the fourth weekly rise
in a row as imports continued to increase. []
U.S. crude futures for April <CLc1> fell $1.50 to $78.81 a
barrel by 1230 GMT. The March contract, which expired on Monday,
hit $80.51 during its last day of trading, the highest for a
front-month contract since Jan. 13.
Brent crude <LCOc1> was trading $1.40 lower at $77.21.
"The main trigger for the sharp fall in oil prices has been
the spike in the dollar, which was partly due to a disappointing
German Ifo index," said Carsten Fritsch, analyst at Commerzbank.
"The whole commodities complex is suffering from the rise in
the dollar. Oil fundamentals are also weak and prices have
become somewhat disconnected from the realities of supply and
demand."
Commodities tend to move inversely to the U.S. currency
because many of them are priced in dollars.
FRENCH STRIKES
Oil prices took some support from strikes by French oil
workers, which could close more than half the country's refining
capacity.
Strikes at Total's <TOTF.PA> refineries entered their
seventh day as workers protested against company plans to shut
one of its six refineries permanently because of weak demand for
fuel. Output has stopped at all the refineries.
Workers at Exxon's <XOM.N> two French refineries have voted
for sympathy walk-outs.
The strikes drew in President Nicolas Sarkozy, who met Total
Chief Executive Christophe de Margerie. Drivers rushed to pumps
while petroleum industry body UFIP said on Monday France had
around seven days of fuel supply. The French government called
for motorists to remain calm. []
Analysts said the strikes had raised concerns over fuel
supply shortages, although refinery stoppages in general usually
translate into lower demand for crude oil.
"I see the market staying relatively high due to this French
strike concern," Andy Sommer, an energy market analyst with EGL
in Switzerland. "We do not know how quickly fundamentals will
tighten, or how long it will last."
U.S. industry group the American Petroleum Institute (API)
was due to release its weekly oil data for the week to Feb. 19
at 2130 GMT on Tuesday.
Analysts in a Reuters poll said they expected inventories of
middle distillates, including heating oil, to fall due to high
heating demand amid the extended cold in the U.S. Northeast.
[]
(Writing by Christopher Johnson; additional reporting by
Alejandro Barbajosa in Singapore; Editing by Sue Thomas)
