NEW YORK (Reuters) - Oil rose slightly to top $80 a barrel on Monday as a French refiner strike and tensions over Iran’s nuclear program outweighed gains in the dollar.
Further support came on short-covering ahead of the expiration of the March U.S. crude oil contract and from buying up of U.S. RBOB gasoline futures as the market gears up for the U.S. summer driving season, traders said.
U.S. crude for March delivery, which expired on Monday, settled 35 cents higher at $80.16 a barrel after hitting $80.51 earlier — the highest for a front-month contract since January 13.
It was the fifth straight session of gains, during which time U.S. crude rose 8.13 percent and marking the longest winning streak since early January.
Brent crude for April rose 42 cents to settle at $78.61 a barrel. U.S. RBOB gasoline futures gained 3.01 cents to $2.1158 a gallon, the highest settle since January 12.
“The front of the RBOB (gasoline futures) curve remains in the crosshairs of the hedge funds and money managers,” said Jim Ritterbusch, president of Ritterbusch & Associates.
“While unresolved labor issues within France’s refinery industry are still widely mentioned as main driver of gasoline strength, we still feel that much of the fund community is stepping up to the plate in an attempt to capture a chunk of the usual seasonal gasoline strength seen across the month of March.”
French motorists rushed to the pumps on the sixth day of a Total refinery workers’ strike, which a union said will close over half of France’s oil refining capacity.
French Petroleum industry body UFIP said on Monday France had around seven days of fuel supply left before it faced a shortage. The CGT union said output would fully halt at Total’s six refineries by Tuesday.
This will cut over 1 million barrels per day (bpd) in French refinery capacity, out of a total capacity of 2 million bpd, according to Reuters calculations.
Support also came from news OPEC member Iran has earmarked potential sites for 10 new nuclear enrichment plants and construction of two of them could begin this year, a nuclear energy official said on Monday.
A Reuters poll of analysts ahead of weekly inventory data forecast U.S. crude oil stocks rose 1.9 million barrels in the week to February 19, while distillate stocks were seen falling.
Data from No. 2 oil consumer China showed strong demand growth last month. The China Petroleum and Chemical Industry Association (CPCIA) said China processed 30.14 million tons of crude in January, up 29 percent from a year earlier.
Oil’s gains came even as the dollar edged up against the euro as markets remained anxious about unresolved debt problems in Greece and a surprise rise in the Federal Reserve’s emergency lending rate. <USD/>
A rise in the dollar can depress oil and other commodities priced in the greenback by making them more expensive for holders of other currencies.
Reporting by Robert Gibbons, Gene Ramos, Matthew Robinson in New York; Alex Lawler in London; Fayen Wong in Perth; Editing by Lisa Shumaker