* Oil rises more than $1 on softer dollar
* Dollar eases on renewed financial sector worries
* Iran still in focus, Hurricane Bertha set to miss Gulf
(Updates prices; adds quote)
By Angela Moon
SEOUL, July 8 (Reuters) - Oil rose by more than a dollar on
Tuesday, rebounding from the previous day's near $4 plunge as
the U.S. dollar weakened on renewed financial sector worries.
U.S. light crude for August delivery <CLc1> climbed $1.01
to $142.38 a barrel by 0603 GMT.
Oil prices fell $3.92, or 2.7 percent, on Monday amid
signals that Iran would be more flexible in negotiations over
its nuclear programme, knocking the market back from last
week's record $145.85 a barrel.
London Brent crude <LCOc1> gained 99 cents to $142.86.
The dollar, which inched up versus the euro but slipped
versus the yen on Tuesday, was pulled back from Monday's gains
by a slide among U.S. equities on concerns that loan companies
Fannie Mae and Freddie Mac might raise a further $75 billion in
additional capital due to an accounting change.
"Oil is likely to be volatile between $140-$150 for this
month, at least, according to movements by the dollar and other
U.S. economy factors," said Lee Moon-bae, senior researcher at
Korea Economic Energy Institute (KEEI).
Investors have been using oil and other commodities as a
hedge against the weaker dollar and inflation.
Oil traders also anticipated easing tensions between Iran
and the West after Tehran responded to a package of incentives
to try to resolve the long-run dispute over its nuclear
efforts.
However Iranian official sent mixed signals, with President
Mahmoud Adhmadinejad rejecting a demand by major powers that it
stop enriching uranium as "illegitimate", while the foreign
minister expressed optimism on the talks. []
In the U.S. political arena, presumptive Democratic
presidential nominee Barack Obama said that toning down the
rhetoric against Iran "might" calm the markets. []
Oil prices are still up nearly 50 percent since the start
of the year, driven partly by geopolitical fears from Iran to
Nigeria as well as exepctations that global supplies will fail
to keep pace with unrelenting demand growth in the years ahead.
With the onset of the six-month Atlantic hurricane season
last month, oil traders will be watching for any signs of a
storm that could disrupt Gulf oil production and refining
operations. Hurricane Bertha became a "major" hurricane on
Monday, but does not appear to be steering into the Gulf of
Mexico.
Traders are now eyeing the oil inventory data to be
released on Wednesday, with a Reuters preliminary poll showing
expectations of a 1.5 million barrel decline in crude stocks, a
rise of 200,000 barrels in gasoline supplies and an increase of
1.8 million barrels in distillates. []
They are also closely watching the G8 meeting in Japan for
any possible concrete steps to fight high oil prices.
Italy's Prime Minister Silvio Berlusconi renewed a proposal
to raise margin requirements in an effort to curb speculation,
although this has found little favour among regulators as yet.
(Reporting by Angela Moon; Editing by Jonathan Leff)
