* U.S. crude hovers below 26-month high
* Trading volumes are light
* U.S. home prices, consumer confidence short of estimates
(Recasts, updates prices, adds reaction to economic data)
NEW YORK, Dec 28 (Reuters) - Oil prices traded above the
pivotal $91-a-barrel-level on Tuesday, hovering just below a
26-month high struck the previous session, as weakness in the
dollar outweighed poor U.S. consumer confidence data.
U.S. crude found early support as the dollar slipped
against a basket of currencies, before giving back some gains
following the release of economic data from the world's top
consumer.
American consumer confidence unexpectedly deteriorated in
December, hurt by increasing worries about the job market,
according to a private report released by the Conference Board.
The data weighed on equities markets. []
Single-family home prices fell for a fourth straight month
in October, pressured by a supply glut, home foreclosures and
high unemployment, according to the Standard &
Poor's/Case-Shiller composite index. []
U.S. crude for February delivery <CLG1> rose 39 cents to
$91.39 a barrel by 12:33 p.m. (1733 GMT), a day after touching
$91.88, the highest crude price since October 2008.
In London, ICE Brent crude <LCOG1> traded 41 cents higher
at $94.26 a barrel.
Copper and gold also found support from the weaker dollar,
which tends to bolster commodities denominated in the
greenback. [] The Chinese yuan rose after China
announced a rate rise at the weekend as the world's
second-largest oil consumer strives to slow down its economy.
"I think the market is pretty quiet on volume, but, that
said, this morning's price action seems to be more reflective
of a positive tone than a negative tone," said Michael Korn,
president of Skokie Energy in Princeton, New Jersey.
"I'm thinking it's more like day traders are playing it
from the long side," Korn added, explaining the generally
firmer tone to the market, along with the corresponding light
volumes.
Trading was extremely light, with total crude volumes
around 114,000, well below the 30-day average of 600,000. RBOB
gasoline traded around 22,000 times and heating oil futures
changed hands near 25,000 times. The products volumes were also
significantly below their 30-day averages. These levels were
also as of 12:33 p.m.
"I think (oil is) being pulled in different directions,
with a definite upward bias," said Phil Flynn, an analyst with
PFGBest Research in Chicago.
"On one hand its commodity side wants to rally, but its
financial instrument side is being restrained because the stock
market is lower (due to U.S. consumer confidence data)."
Oil has rallied by 35 percent from lows struck in May, and
is up roughly 15 percent from the end of 2009.
A rally across financial markets took hold in earnest
around September, spurred by the U.S. Federal Reserve's latest
round of quantitative easing, a weakened dollar and rising
demand.
"Data in recent weeks have been supportive of the stocks
and commodity markets globally. The U.S. will avoid a
double-dip. The Asian region including Japan looks a little bit
better, with its industrial production finally showing an
increase," said David Cohen, director of Asian Economic
Forecasting at Action Economics.
"I think a lot of people are expecting prices to turn
higher towards $100 a barrel next year."
The Organization of Arab Petroleum Exporting Countries,
some of whose members also belong to OPEC, met in Cairo at the
weekend, when leading exporter Saudi Arabia reiterated its
preference for a $70-$80 price range. Others said $100 would be
fair and the global economy could withstand it.
Oil has also found some support from cold weather across
the United States and Europe. A blizzard across the U.S. East
Coast this week was viewed as mixed for markets as it bolstered
heating demand but hit travel consumption by shutting airports
and slowing road travel.
The latest indications of fundamentals of supply and demand
for the United States, the world's biggest oil burner, will not
be released until Wednesday and Thursday. Figures published
last week showed a big drop in crude inventories, although they
were still higher than a year ago.
Another factor some traders were looking at was the
February/March crude spread on NYMEX, which was in a 73 cents
contango on Tuesday at midday.
"Minus 73 cents on that spread is not indicative of a tight
market," said Skokie Energy's Korn.
(Reporting by Jeffrey Kerr and Matthew Robinson in New York;
Robert Gibbons in Houston; Barbara Lewis in London; Seng Li
Peng in Singapore; Editing by Walter Bagley)
