* U.S. weekly crude stocks seen up on imports -poll
* Investors watch equities, economic data for cues
* BP results beat forecasts, European shares up slightly
(Updates prices)
By Chris Baldwin
LONDON, Oct 27 (Reuters) - Oil hovered around $79 a barrel
on Tuesday, up slightly after three straight days of decline as
the dollar slipped against the euro and traders scoured for
evidence of economic recovery to drive fuel demand.
U.S. crude <CLc1>for December delivery rose 31 cents to $79
a barrel by 1337 GMT, after settling down $1.82 at $78.68 on
Monday.
London Brent crude <LCOc1> was up 31 cents at $77.57.
"Underpinning everything, the big thing is what's happening
to the dollar. Even the very short term movements. It
overshadows everything," said David Morrison, market strategist
at GFT Global.
The dollar eased against the euro and a basket of currencies
<.DXY> on Tuesday after a rally on Monday driven by speculation
the Federal Reserve would signal a tightening in monetary policy
down the road.
Traders are looking 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.
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.
[]
Distillate stocks probably declined 900,000 barrels, while
gasoline stocks were seen down 300,000 barrels, the poll showed.
ECONOMIC DATA, EQUITIES
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.
Traders anticipated the market would remain nervous about
prospects for growth and a series of positive corporate earnings
has been based on cost-cutting rather than increased consumer
demand.
Energy heavyweight BP <BP.L> beat third-quarter earnings
forecasts by a big margin on Tuesday, following an aggressive
cost reduction, but its profits halved. []
The results helped to drive London shares higher, while the
all-country world stocks index <.MIWD00000PUS> eased.
Highlighting skittishness over stocks, commodities and
growth-linked currencies, the Chicago Board Options Exchange
Volatility Index, Wall Street's favourite metric for market
sentiment, jumped 9.16 percent on Monday.
Data released on Tuesday showing U.S. house prices had risen
for a fourth straight month provided a brief spur to market
sentiment. []
U.S. consumer confidence figures will also be released on
Tuesday, but the more important data will be third quarter U.S.
gross domestic product (GDP) on Thursday.
Analysts expect the U.S. economy to expand 3.3 percent in
the third quarter. Anything lower, like the shock GDP numbers
from Britain late last week, could trigger another wave of
selling in riskier assets, such as oil.
(Additional reporting by Fayen Wong in Perth; Editing by
Barbara Lewis)
