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UPDATE 10-Oil touches 8-week high over $82 on optimism







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08/03/2010 07:12 London time | story: 572244

* 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

(Recasts lede paragraphs)

By Rebekah Kebede

NEW YORK, March 8 (Reuters) - Oil rose on Monday, briefly touching an eight-week high over $82 a barrel on Monday, in choppy trade as economic optimism outweighed the stronger dollar.

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, and as low as $80.75 a barrel.

Brent crude <LCOc1> settled at $80.47, up 58 cents after hitting $80.92, also the highest since Jan. 11.

The dollar index <.DXY> rose slightly, reversing earlier losses. A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies.

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For a graphic on global oil prices and demand, click: http://link.reuters.com/can53j

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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.



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"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. [ID:nNLL8EE629]

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. [ID:nLDE6260JZ]

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.[.N]

2010 HIGH

Earlier Monday, oil prices climbed over $82 to an eight-week high, approaching 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," said Gene McGillian, analyst, at Tradition Energy in Stamford, Connecticut.

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. [ID:nN05242375]

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. [ID:nTOE62703M]

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. [ID:nLDE61P1NL] (Additional reporting by Robert Gibbons and Gene Ramos in New York, Alex Lawler in London, Osamu Tsukimori in Tokyo; Editing by Julie Ingwersen)









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