* Falling dollar, Greek bailout hopes give boost
* Snowy U.S. conditions, Iran tension offer support
(Recasts, updates throughout)
By Rebekah Kebede
NEW YORK, Feb 9 (Reuters) - Oil rose over 2 percent on
Tuesday as reports of a possible aid package for the troubled
Greek economy sent Wall Street higher, weakened the U.S. dollar
and supported oil prices.
U.S. crude prices for March delivery <CLc1> rose $1.76 to
$73.65 a barrel by 1:32 p.m. EST (1832 GMT) after hitting a
high of $74.15. At the end of last week, prices briefly dipped
below $70 a barrel to the lowest level since mid-December.
ICE Brent crude <LCOc1> rose $1.86 to $71.97.
"The oil market is reacting to the reactions in the S&P
500. If that ticks higher, we're going higher," said Tim Evans,
energy analyst for Citi Futures Perspective.
Although Germany denied reports that a decision had already
been made to extend an aid package to Greece, the S&P 500
remained up about 1.6 percent in the early afternoon and the
Dow was up 1.9 percent.
By midday Tuesday, the U.S. dollar was off a recent 8-1/2
month high against the euro. []
Oil tends to rise when the dollar falls, making crude and
petroleum products cheaper for nondollar buyers. Weakness in
the dollar also encourages investors to move into more tangible
investments such as commodities.
Wall Street rose broadly on Tuesday, with the Dow on track
for its largest daily percentage gain since July. []
Traders look to equity markets for signs of a broader
economic recovery which could revive flagging oil demand.
Heating oil futures led the oil complex gains on Tuesday as
snowy conditions in the U.S. Northeast, the world's top heating
oil consumer, was expected to boost demand for the fuel.
Heating oil demand is expected to be 7.6 percent above
normal this week, the National Weather Service said on Monday.
[] []
IRAN SANCTIONS
Geopolitical tensions over Iran's nuclear program also
helped to underpin oil prices, analysts said.
The United States on Tuesday called for a U.N. sanctions
resolution on Iran within weeks after Iran announced that work
had begun to make higher-grade nuclear fuel. []
The Islamic Republic denies its program has military aims.
Sanctions against Iran could prompt the nation to retaliate
by reducing crude oil output or blocking exports traveling
through the Strait of Hormuz, through which some 40 percent of
the world's globally traded oil passes.
Continuing problems with militants in oil-producing Nigeria
also contributed to crude oil gains.
The market will later look to the release of the weekly
U.S. oil inventory data from the American Petroleum Institute
and the Energy Information Administration.
The API data due out at 4:30 p.m. EST (2130 GMT) may
provide clues about the pace of fuel demand recovery. The EIA
said Tuesday it will decide Tuesday afternoon whether or not to
delay its weekly data, normally released on Wednesdays at 10:30
a.m. EST, this afternoon.
U.S. crude oil inventories likely rose last week by 1.2
million barrels and distillates fell 1.7 million barrels, a
preliminary Reuters poll of nine analysts showed on Monday.
[]
(Additional reporting by Emma Farge in London, Jennifer Tan in
Singapore; editing by Keiron Henderson)
