* Dollar broadly weaker, supportive to commodities
* French oil port strike enters 11th day
* U.S. jobless claims fell in latest week
(Adds graphic, details on strike, U.S. jobless claims,
updates prices)
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 a French oil port strike that has
disrupted supplies.
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 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 47 cents to
$83.70 a barrel by 1232 GMT. ICE Brent <LCOc1> added 40 cents to
$85.46.
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. []
Talks between strikers at the Fos Lavera oil port in France
and management were still in a deadlock and no meetings were
planned, the port said as the strike entered its 11th day.
[]
The dispute has blocked oil tankers, forced some oil
refineries to reduce operations and driven up fuel prices in
Europe -- supporting the wider oil market.
"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
closely watched monthly data due 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. []
New U.S. claims for unemployment benefits unexpectedly fell
last week, touching their lowest level in nearly three months,
according to a government report on Thursday. []
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 (RSI), at 72, is in overbought
territory, which can indicate a pullback is coming.
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For a related graphic on U.S. crude and its RSI:
http://graphics.thomsonreuters.com/gfx1/TRTrain_20100710125257.jpg ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
"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. []
(Additional reporting by Alejandro Barbajosa, graphic by David
Turner, Editing by Sue Thomas)
