* U.S. consumer confidence falls to 10-month low in Feb.
* Dollar up vs euro on concerns about German economy
* U.S. crude oil stocks expected to rise
* French refinery strike enters seventh day
(Updates throughout, changes dateline from LONDON)
NEW YORK, Feb 23 (Reuters) - Oil prices dropped more than
$1 to below $79 a barrel on Tuesday, breaking a five-day rally,
as a fall in U.S. consumer confidence and German business
sentiment sent investors into safer havens, such as the
dollar.
U.S. crude futures for April <CLc1> traded down $1.65 at
$78.66 a barrel by 12:29 p.m. EST (1729 GMT). The March
contract, which expired on Monday, hit $80.51 during its last
day of trading, the highest price for a front-month contract
since Jan. 13. In London, Brent crude <LCOc1> fell $1.56 to
$77.05 a barrel.
U.S. consumer confidence fell in February to the lowest
level in 10 months as consumers' short-term outlook for the
jobs market worsened, according to a report by the Conference
Board, an industry group. []
German business sentiment fell for the first time in almost
a year in February, suggesting a harsh winter may send Europe's
largest economy sliding back into contraction in the first
quarter. []
The dollar accelerated gains against the euro after
markets, already keyed up for testimony from the U.S. Federal
Reserve chief later this week, saw sinking U.S. consumer
confidence as a red light for risk. []
Caution ahead of testimony from Federal Reserve Chairman
Ben Bernanke on Wednesday also cut demand for risk. Bernanke
will give his semiannual testimony on monetary policy and the
state of the economy before the House Financial Services
Committee.
"The overarching, unavoidable, inescapable fact is that
consumers are still reeling from the effects of the greatest
economic calamity of most of their lifetimes," Mike
Fitzpatrick, vice president at MF Global in New York, said in a
research note.
"They have been forced to deleverage in the face of
possible job loss and foreclosure. Until they begin to return
to work, economic growth is going to be grindingly slow and so
will energy demand growth."
The market was awaiting U.S. oil stocks data due later on
Tuesday and on Wednesday morning. A Reuters poll of analysts
forecast the data will show a rise of 1.9 million barrels in
crude oil inventories, the fourth weekly rise in a row as
imports continued to increase. []
The American Petroleum Institute, an industry group, was
due to release its weekly oil data for the week to Feb. 19 at
4:30 p.m. EST (2130 GMT) on Tuesday, with data from the U.S.
Energy Information Administration due on Wednesday at 10:30
a.m. EST (1530 GMT).
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.
Total <TOTF.PA> has pledged not to close or sell any French
refineries other than its Dunkirk plant for five years,
clearing the way to end a week-long strike that has embarrassed
the government ahead of key March regional elections.
(Reporting by Gene Ramos, Robert Gibbons and Matthew Robinson
in New York; Ikuko Kurahone and Christopher Johnson in London
and Alejandro Barbajosa in Singapore; Editing by Walter
Bagley)
