* Oil jumps on equities, corporate earnings strong
* IEA cuts estimated oil demand growth for 2011
* U.S. crude inventories fell 2 mln barrels last week-poll
* Coming Up: API inventory data 4:30 p.m. EDT (2030 GMT)
(Recasts, updates prices, changes dateline from LONDON)
By Brian Ellsworth
NEW YORK, July 13 (Reuters) - Oil prices rose toward $77
per barrel on Tuesday as rising equities markets helped traders
shrug off a report showing the pace of crude demand slowing
next year.
The principal U.S. stock indexes rose more than 1 percent
after better-than-expected results from aluminum maker Alcoa
Inc <AA.N> and railway company CSX Corp <CSX.N> gave a
promising start to the earnings season.
That helped oil markets overlook an International Energy
Agency report estimating global oil demand growth slowing in
2011 by around 400,000 barrels per day compared to 2010 growth.
[]
"There's no doubt the stock market led the oil market
higher," said Phil Flynn, senior analyst with PFGBest
Research.
"The market seems to be ignoring the IEA report, which is
bearish, especially coming from an agency that usually says the
world needs more oil."
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Reuters Insider interview with IEA's David Fyfe:
http://link.reuters.com/wev96m
Technical view []
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At 11 a.m. EDT (1500 GMT), U.S. crude for August delivery
<CLc1> was up $2 at $76.95 a barrel, having earlier fallen to
$74.25.
In London, Brent crude oil for August delivery <LCOc1> was
up $2.18 at $76.55 a barrel. The August contract price moved
briefly above September <LCOc2> as traders bet maintenance in
the North Sea would boost Brent in the short term.
The Dow Jones industrial average <> was up 1.27
percent, while the Standard & Poor's 500 Index <.SPX> was up
1.19 percent.
Prices were also supported by rising European equity
markets [] and a decline in the dollar <.DXY>. A weakening
dollar is bullish for oil because it makes crude cheaper for
buyers holding other currencies.
Continued strength in U.S. corporate earnings reports would
signal overall strength in the U.S. economy, which would imply
greater future demand for oil.
Global oil demand will grow by 1.35 million bpd next year
to 87.84 million bpd, according to the IEA, which advises 28
industrial countries, compared with demand growth of 1.77
million bpd expected this year.
The IEA revised its 2010 figure upward by 80,000 bpd in
Tuesday's report from its June estimate.
"The key element is the gradual scaling back of economic
stimulus programs, which we are assuming takes place over the
next 12 to 15 months," David Fyfe, head of the IEA's Oil
Industry and Markets Division, told Reuters Insider TV.
"That's taking a little of the post-recessionary froth out
of the market."
Prices were also supported by signs that bulging
inventories in the United States, the world's largest energy
consumer, may have fallen last week.
U.S. crude stockpiles were predicted to have dropped by 2
million barrels in the week to July 9, a Reuters survey showed,
after tumbling 5 million barrels a week earlier because of
disruptions related to Hurricane Alex. []
Distillate inventories probably rose by 700,000 barrels,
the survey showed, while gasoline stocks were expected to have
risen by about 300,000 barrels.
The industry group American Petroleum Institute will
release its weekly inventory report on Tuesday at 4:30 p.m. EDT
(2030 GMT), followed by government statistics from the Energy
Information Administration on Wednesday at 10:30 a.m. EDT (1430
GMT).
(Additional reporting by David Sheppard in London, and
Alejandro Barbajosa; Editing by Walter Bagley)
