* Demand optimism, weak dollar support
* U.S. weekly oil data eyed
(Recasts, updates prices, previous dateline LONDON)
By Rebekah Kebede
NEW YORK, Feb 2 (Reuters) - Oil rose over 3 percent to top
$76 a barrel on Tuesday, gaining for the second session on
optimism surrounding economic recovery and weakness in the
dollar.
U.S. crude oil futures <CLc1> rose $2.50 to $76.93 a barrel
by 12:51 p.m. EDT (1751 GMT).
ICE Brent <LCOc1> rose $2.61 to $75.72.
"The economic data has been pretty good and petroleum
markets got a cue to correct," Andrew Lebow, analyst at MF
Global in New York.
Wall Street rose for the second day after positive earnings
reports from economic bellwether companies United Parcel
Service and Emerson Electric. []
The S&P 500 is up for a second straight day after falling
6.2 percent in the last three weeks of January.
The dollar index dipped by midday, supporting oil prices.
[]
Monday's news that the Institute for Supply Management
(ISM) index rose to its highest since August 2004, a sign the
world's top economy is recovering from the deepest recession in
decades, which could boost oil demand, continued to bolster oil
prices as well. []
Also supportive was news that China's appetite for foreign
oil will stay near record levels in coming months due to a
recovering economy, rising refining and stockpiling capacity.
[]
Despite optimism for oil demand, inventories of oil and
refined products remain high.
The market is awaiting two sets of weekly U.S. oil
statistics due out later on Tuesday from an industry group and
on Wednesday from the government.
Analysts in a Reuters poll expect the data to show falls in
crude and middle distillate inventories, including heating oil,
and an increase in gasoline stocks. []
Although U.S. oil data is forecast to show weekly drops,
the absolute inventory volumes of refined products are likely
to remain much above year-earlier levels.
Analysts polled by Reuters also indicated that refinery
utilization rates would remain at 78.5 percent of capacity, the
lowest rate in about two decades, not counting hurricane
shutdowns.
Sluggish fuel demand has forced refiners to cut back on
production and in some cases, shut plants.
Oil major BP Plc <BP.L> reported a loss in its downstream
sector on Tuesday with refining margins at a 15-year low due to
weak demand for fuels.
In an interview with Reuters Television, BP chief executive
Tony Hayward said margins will likely be pressured by surplus
refining capacity for some years to come. []
On Monday, top U.S. oil company Exxon Mobil Corp <XOM.N>
also reported losses due to dismal refining margins and U.S.
Sunoco Inc <SUN.N> will permanently shut down a part of its
refining capacity. []
(Additional reporting by Ikuko Kurahone in London, Alejandro
Barbajosa; Editing by Lisa Shumaker)
