* Stronger dollar, economic optimism main factors
* Some analysts see oil testing 2010 high near $84
* Coming up: U.S. inventory data from API due Tuesday
(Updates with settlement prices)
By Rebekah Kebede
NEW YORK, March 8 (Reuters) - Oil rose toward $82 a barrel
on Monday in choppy trade as a firmer dollar and improved
economic optimism tugged prices back and forth.
Crude oil futures reached an eight-week high above $82 a
barrel, but also traded as low as $80.75 a barrel.
U.S. crude <CLc1> settled at $81.87 a barrel, up 37 cents,
after touching $82.41, the highest since $83.95 on Jan. 11.
Brent crude <LCOc1> settled at $80.47, up 58 cents after
hitting $80.92, also the highest since Jan. 11.
"We've been either side of unchanged all day. The market is
looking for direction as both buyers and sellers seem
comfortable with this level," said Mike Fitzpatrick, vice
president at MF Global in New York.
The dollar index <.DXY> rose slightly, reversing earlier
losses. A stronger dollar makes dollar-denominated commodities
more expensive for holders of other currencies.
Positive economic data such as a report on Friday showing
U.S. employers cut fewer jobs than expected in February have
helped oil rally in the last several weeks, but some market
watchers were cautious.
"People are doing back flips over the jobs numbers. They
were nice but we're still losing jobs so I'm a bit cautious on
my euphoria," said Dan Flynn, analyst at PFGBest Research in
Chicago.
A private research group reported on Monday that the U.S.
job market continued to improve in February for the sixth
consecutive month. []
Sentiment about the global economy also improved, with
fears about debt-stricken Greece subsiding. On Sunday, French
President Nicolas Sarkozy promised Greece that euro zone
countries would help it overcome its financial problems and
vowed a crackdown on speculators blamed by Athens for its woes.
[]
On Wall Street, stocks were nearly flat as optimism from
AIG's sale of a unit and McDonald's sales data were offset by
falling healthcare shares.[]
2010 HIGH
Earlier Monday, oil prices climbed over $82 to an
eight-week high, just shy of the 2010 high near $84 a barrel.
"The rally still looks pretty good even with our pullback
to midday lows ... Right now, it does look like the market is
trying to hold above $80 and move higher," McGillian said.
Money managers extended their net long crude oil futures
positions on the New York Mercantile Exchange in the week to
March 2, the Commodity Futures Trading Commission said on
Friday. []
Also supportive was news that China will build two
strategic oil reserve bases -- a development likely to underpin
demand in the world's second-largest consumer. []
With global demand expected to revive in 2010, the
Organization of the Petroleum Exporting Countries looks set to
keep its production target unchanged when it meets on March 17,
as it has for more than a year. []
(Additional reporting by Robert Gibbons and Gene Ramos in New
York, Alex Lawler in London, Osamu Tsukimori in Tokyo; Editing
by David Gregorio)
