UPDATE 1-Oil up for 9th day, hits 1-year high on weak dollar

                                
 * US crude hits 1-yr peak above $80 a barrel
                                
 * Supply overhang weighs, but weak dlr, firm equities
support
 (Updates prices, adds quote)
                                
 By Nick Trevethan
                                
 SINGAPORE, Oct 20 (Reuters) - U.S. crude futures rallied to
a one-year high above $80 a barrel on Tuesday, lifted by a
slump in the dollar to a 14-month low and a rally in U.S. stock
markets to their highest in 12 months.
                                
 Strong earnings have boosted U.S. equity markets, with the
Dow industrials up another 1 percent on Monday, beating down
the dollar to make a range of commodities more appealing for
non-dollar buyers.
                                
 Apple became the latest company to report solid quarterly
numbers, after the close of New York markets. [.N]
                                
 U.S. crude for November delivery <CLc1> touched $80.05 a
barrel in Asia, its highest since Oct. 14 last year, but
retreated to $79.80 a barrel by 0515 GMT, up 19 cents from
Monday's settlement.
                                
 London Brent crude <LCOc1> rose 22 cents to $77.99 a barrel
and earlier touched $78.18.
                                
 "This is a demand story. If we focused on supply this
market would be falling," ANZ's senior commodities analyst Mark
Pervan said.
                                
 "I think we will continue higher as we move further into
the fourth quarter. Investors think equity earnings are a good
guide for the economic outlook so the better-than-expected
reporting season is supporting."
                                
 He added distillate stockpiles were likely to fall as the
quarter wears on and winter takes hold in the northern
hemisphere, which could trigger covering of remaining short
positions.
                                
 U.S. weekly oil inventory data from the American Petroleum
Institute is released later in the day.
                                
 A preliminary Reuters poll of analysts forecast the data
will show a 2 million barrel build in crude stocks last week.
Distillate stocks were seen falling by 1.6 million barrels
while gasoline inventories were forecast to fall by 1.5 million
barrels. [EIA/S]
                                
 The nine straight days of prices gains have lifted oil by
15 percent and equal a run seen in July, putting crude on track
for its strongest monthly performance since May, although other
analysts are concerned whether the rally can continue.
                                
 "Oil broke above resistance at $75. $80 is the next target
although there is little in the way of fundamental support.
OPEC is overproducing and even though there is talk of a severe
winter, distillate stocks are at 26-year highs," MF Global
analyst Edward Meir said. "You have the November contract
expiration. That could also weigh as it gets flushed out and
drags the rest of the curve down. I'd be cautious today."
                                
 The soggy dollar trading around 14-month low and just shy
of $1.50 versus the euro, as investors bet the Federal Reserve
will hold U.S. interest rates near zero. [USD/]
                                
 For a graphic showing the strengthening inverse correlation
between the two markets, click:
 http://graphics.thomsonreuters.com/109/CMD_USCRD1009.gif
 (Editing by Michael Urquhart)