* Oil posts 7.7 percent rise for the week
* Tensions persist over Iran nuclear program
* Total refiners strikes continue
(Updates prices at settlement, recasts, updates quote)
By Edward McAllister
NEW YORK, Feb 19 (Reuters) - Oil prices rose toward $80 a
barrel on Friday as refinery strikes in France and tensions
about Iran's nuclear program outweighed fears that U.S.
monetary tightening could slow demand growth in the world's
largest oil consumer.
U.S. crude for March delivery <CLc1> rose 75 cents to
settle at $79.81 a barrel, marking a 7.7 percent rise for the
week, the highest one-week percentage gain for front-month
crude since October. In London, ICE Brent crude for April
<LCOc1> rose 41 cents to $78.19 a barrel.
Workers at Total's French refineries continued their strike
action, raising concern about fuel supplies in the coming days.
[]
Tension about Iran's nuclear program also provided support.
Russia's foreign minister on Friday reportedly said that Moscow
was very concerned about Iran's lack of cooperation with the
U.N nuclear agency. []
"The refinery strike in France and concerns about Iran's
nuclear posturings are helping push up crude futures today,"
said Daniel Flynn, analyst, PFGBest Research, Chicago.
Crude prices fell by more than $1 to a low of $77.76 a
barrel earlier in the day, after the U.S Federal Reserve raised
its discount rate by a quarter percentage point to 0.75 percent
late on Thursday, raising concerns about the repercussions of
monetary tightening for energy demand.
On Friday the Fed poured cold water on speculation that a
surprise hike to its emergency lending rate signaled a change
in monetary policy. []
"The Federal Reserve's Dudley is trying to downplay
yesterday's discount rate hike, reassuring that it is not the
beginning of tighter rate policy," said Tom Bentz, analyst at
BNP Paribas Commodity Futures Inc in New York.
New York Fed President William Dudley said on Friday U.S.
economic growth would likely be modest, keeping price pressures
under wraps and enabling the central bank to keep benchmark
interest rates ultra-low for an extended period.
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For a graphic on the impact of the Fed rate hike on
commodities, see:
http://graphics.thomsonreuters.com/0210/CMD_RTHK0210.gif
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Oil investors have looked to wider economic data over the
past year for signs of economic recovery and a potential
rebound in energy demand.
U.S. consumer prices rose just 0.2 percent in January -- a
move that reassured investors that the loose monetary policy
that has helped pull the world's largest economy out of
recession and stoked fuel demand was likely to last.
[] []
U.S. stocks rose on Friday as investors took the Fed
announcement as further evidence that the economy is
strengthening. []
Oil prices have firmed gradually from lows of near $30 a
barrel in December 2008 to the current range between $70 and
$85 a barrel as low lending rates have spurred growth and
encouraged investors to pour funds into commodities as a hedge
against future inflation.
While the benchmark Federal funds rate was left unchanged
at near zero, the decision to increase the rate the Fed charges
banks for emergency loans raised concerns earlier that U.S.
monetary policy could begin to shift.
Last Friday, China's central bank said it would lift bank
reserve requirements in an unexpected tightening move that
could slow demand in the world's No. 2 fuel consumer.
[]
(Additional reporting by Robert Gibbons and Gene Ramos in New
York, Emma Farge in London, Seng Li Peng in Singapore; Editing
by Walter Bagley)
