UPDATE 3-Oil rises above $79 ahead of inventory data

                                
 * U.S. weekly crude stocks seen up on imports -poll
                                
 * Investors watch equities, dollar data for cues
                                
 * BP results beat forecasts, European shares up slightly
                                
 
                                
 (Updates prices, adds comment)
                                
 By Chris Baldwin
                                
 LONDON, Oct 27 (Reuters) - Oil rose above $79 a barrel on
Tuesday, up after three straight days of decline as investors
awaited new leads from equities markets and weekly crude
inventory data from the United States.
                                
 U.S. crude for December delivery <CLc1> climbed 50 cents to
$79.18 a barrel by 1052 GMT, after settling down $1.82 at $78.68
on Monday.
                                
 London Brent crude was up 51 cents at $77.77.
                                
 "There were no fundamental reasons behind the oil market
moves, just close correlation to equity markets and returning
dollar weakness," said analyst Carsten Fritsch at Commerzbank.
                                
 The dollar slipped against the euro on Tuesday after a
Monday rally on speculation the Federal Reserve would signal a
tightening in monetary policy down the road sent the yield on
10-year U.S. bonds to a two-month high. [USD/]
                                
 Traders will also look to the weekly American Petroleum
Institute (API) crude oil report later in the session for clues
on fuel demand in the world's largest energy consumer.
                                
 "At this time it (the oil market) is more dependent on the
direction of the dollar than it is on whatever the DOE, OPEC,
China or even Goldman Sachs has to say," analysts at the Schork
Group said in their daily newsletter.
                                
 Highlighting skittishness over stocks, commodities and
growth-linked currencies, the Chicago Board Options Exchange
Volatility Index <.VIX>, Wall Street's favourite metric for
market sentiment, jumped 9.16 percent on Monday. [ID:nN26231028]
                                
 European equity markets bucked the trend to rise 0.04
percent, with energy stocks taking the lead after oil
heavyweight BP's <BP.L> third-quarter results beat forecasts
following an aggressive cost-cutting programme.[ID:nLR617105]
                                
 
                                
 THURSDAY GDP
                                
 Although crude prices have risen almost 77 percent this
year, they are still about half the record of more than $147 per
barrel touched last July.
                                
 Analysts said investors were likely to remain wary ahead of
U.S. consumer numbers for October and house price index data for
August, both due later in the day. Also, some cautiousness among
traders is likely to prevail ahead of third-quarter U.S. gross
domestic product (GDP) data on Thursday.
                                
 Analysts expect the U.S. economy to expand 3.3 percent in
the third quarter [ECONUS]. Anything lower, like the shock GDP
numbers from Britain late last week, could trigger another wave
of selling in riskier assets.
                                
 U.S. crude inventories probably rose 1.4 million barrels
last week, according to a preliminary Reuters poll ahead of an
American Petroleum Institute's weekly data later on Tuesday.
[EIA/S]
                                
 Distillate stocks probably declined 900,000 barrels, while
gasoline stocks were seen down 300,000 barrels, the poll showed.
 (Additional reporting by Fayen Wong in Perth; Editing by Sue
Thomas)