* Dollar broadly weaker, supportive to commodities
* Lavera refinery workers join French strike, says union
* Coming Up: U.S. weekly initial jobless claims; 1230 GMT
(Updates prices, adds quote)
By Alex Lawler
LONDON, Oct 7 (Reuters) - Oil rose towards $84 a barrel on
Thursday, within sight of a five-month high, supported by
expectations central banks will ease monetary policy to shore up
sluggish economies and as a French oil port strike widened.
A falling U.S. dollar, linked to the expected inflow of
fresh dollars into the economy, has spurred money flows into oil
and other commodities. The dollar was down almost 0.3 percent
against a basket of currencies. <.DXY>
"It's still the same story -- purely driven by financial
markets, particularly the falling U.S. dollar which pushes up
commodity prices in dollar terms across the board," said Carsten
Fritsch, analyst at Commerzbank in Frankfurt.
U.S. crude <CLc1> for delivery in November rose 42 cents to
$83.65 a barrel by 1029 GMT. ICE Brent <LCOc1> added 32 cents to
$85.38.
Oil in New York traded as high as $84.09 on Wednesday, the
highest since May 4. Gold set another record high on Thursday,
while the weak dollar also boosted base metals with copper
trading near a 26-month high. []
French port workers, in their 11th consecutive day of
strike, were blocking dozens of crude and oil product vessels,
threatening the idling of the six French refineries dependent on
the hub.
The dispute has supported European oil products prices and
the wider oil market. Workers at the 207,000-barrel-per-day
Lavera plant voted to join the strike, CGT union officials said
on Thursday. []
"It will have a very strong impact on the supply of oil
products," said Christophe Barret, an oil analyst at Credit
Agricole. "I think it is one of the main factors supporting
product and crude oil prices."
QE2
The prospect of a second round of U.S. quantitative easing,
known as QE2, hangs in part on U.S. employment reports, with
weekly statistics due on Thursday and monthly data on Friday.
In a precursor of the monthly jobs figures, ADP's national
employment report on Wednesday said private employers in the
U.S. cut 39,000 jobs in September, versus expectations for an
increase. []
Meetings of the European Central Bank and Bank of England on
Thursday will be watched for any hint that, like the Federal
Reserve and Bank of Japan, policymakers are warming up to using
newly printed money to buy assets.
The rally in oil prices may be close to running its course
for now, according to some technical indicators. U.S. crude's
relative strength index at 72 is in overbought territory, which
can indicate a pullback is coming.
"No doubt, many sectors are overbought and so the upside
response is looking more sluggish, but we think the more likely
variable has to do with nervousness ahead of the non-farm
payroll number out on Friday," MF Global commodities analyst
Edward Meir said in a report.
Also helping oil's rise was the drop in U.S. fuel
inventories reported on Wednesday. Stocks of gasoline and
distillates fell more than expected, while crude oil supplies
rose more than forecast. []
(Reporting by Alejandro Barbajosa and Alex Lawler; Editing by
Keiron Henderson and Jon Hemming)
