* Iran says talks on nuclear fuel swap continue
* Commodities gain as dollar slips against euro
* Light volume seen exaggerating price moves
(Updates with settlement prices, market activity)
By Rebekah Kebede
NEW YORK, Feb 16 (Reuters) - Oil prices settled nearly 4
percent higher at $77 a barrel on Tuesday, responding to a
weaker U.S. dollar, stronger equities, and growing tensions
over sanctions against Iran.
U.S. crude for March delivery <CLc1> settled at $77.01 a
barrel, up $2.88. In London, the benchmark Brent crude contract
<LCOc1> for April delivery settled at $75.68, up $3.17.
Trading volumes were light, with much of Asia shut for the
Lunar New Year holiday and U.S. markets opening after
Presidents Day. There was no settlement price on Monday as
floor activity on the New York Mercantile Exchange was closed.
"The oil market is reacting to the dollar being weak, and
that is a big part of why crude futures are higher today,"
said Phil Flynn, an analyst at PFGBest Research in Chicago.
"At the same time, we are seeing prices of other
commodities, such as gold, silver and copper, rise sharply.
Trading volume is light at this point and that is making price
moves faster than they would be if volumes were heavier," he
added.
The U.S. dollar slipped against the euro as some traders
felt the European currency had dropped too far on concerns
about the Greek economy.[]
"There is a renewed appetite for risk on the feeling that
the European Union sovereign debt problem is under control.
Sadly, we see no evidence of this. Certainly, when confidence
erodes, a store of value theme lends some buoyancy to
commodities," said Mike Fitzpatrick, vice president at MF
Global in New York.
A weaker dollar tends to support dollar-priced commodities
as they become less expensive for holders of other currencies.
Wall Street stock indexes were lifted by commodity-related
shares and by a jump in New York state's manufacturing index,
which rose more than expected in February.[]
Expectations of an economic recovery have supported oil
prices, which have traded in a relatively tight $15 range
between $69 and $84 a barrel since the beginning of October.
Prices had climbed to a record above $147 a barrel in July
2008, then fell to less than $33 at the end of that year.
GEOPOLITICAL TENSIONS
Iranian President Mahmoud Ahmadinejad said talks over a
proposed nuclear fuel swap were continuing and any country that
tried to impose new sanctions on Iran would regret its
actions.[]
U.S. Secretary of State Hillary Clinton has sought backing
from oil giant Saudi Arabia to help win Chinese support for
additional sanctions targeting Iran's Revolutionary Guards.
In Nigeria, the acting president, Goodluck Jonathan, is
looking for swift progress reviving an amnesty program in the
oil-producing Niger Delta, where years of attacks by militants
have disrupted supplies.
U.S. oil inventory reports will be published a day later
than usual this week because of Monday's holiday.
The American Petroleum Institute will release statistics
collated from industry sources on Wednesday, followed by
government data from the Energy Information Administration on
Thursday.[][]
(Additional reporting by Jo Winterbottom in London, Alejandro
Barbajosa in Singapore; Editing by David Gregorio)
