* U.S. weekly oil data awaited, crude stocks to edge up
* Wall Street rises for second straight day
(Updates prices and market activity)
By Rebekah Kebede
NEW YORK, Feb 2 (Reuters) - Oil prices rose nearly 4
percent to top $77 a barrel on Tuesday, gaining for the second
session on optimism about economic recovery and weakness in the
dollar.
U.S. crude oil futures <CLc1> settled at $77.23 a barrel,
up $2.80 or 3.76 percent, the largest percentage gain since
Sept. 30, when prices gained 5.8 percent.
In London, ICE Brent crude <LCOc1> settled at $76.06 a
barrel, up $2.95.
"The outlook is decidedly more bullish for the
economy...there is a kind of pent up desire on the part of
investors to buy in this market. This is their first chance to
have a reason to buy today and so I think that's a factor
here," said Peter Beutel, president, Cameron Hanover, New
Canaan, Connecticut.
"If there are signs that the consumer is coming back, the
economy is coming back, these are factors that are working
together here to push prices higher."
Wall Street rose for the second day after positive earnings
reports from economic bellwether companies United Parcel
Service and Emerson Electric. A rise in pending home sales also
helped bolster stocks. []
The S&P 500 was up for a second straight day after falling
6.2 percent in the last three weeks of January.
The dollar dipped as strong corporate earnings and improved
economic data boosted risk appetite, supporting oil prices.
[]
Also supportive was news that China's appetite for foreign
oil will stay near record levels in coming months due to a
recovering economy and rising refining and stockpiling
capacity. []
Oil prices continued to be bolstered by Monday's news that
the Institute for Supply Management's 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. []
Gasoline futures led the energy complex, likely due to news
of a weakening refining industry, analysts said.
"Concerns over continued reports of mothballed refineries
not only here in the U.S. but in Europe as well (and) poor
downstream results.... I think that's all feeding into this
idea that capacity is going to be constrained and we could get
some sort of turnaround in demand that could put pressure on
supplies," Addison Armstrong, director of market research,
Tradition Energy in Stamford, Connecticut.
The market was awaiting two sets of weekly U.S. oil
statistics, one due later on Tuesday from an industry group and
the other on Wednesday from the government.
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.
BP Plc <BP.L> reported a loss in its downstream sector,
with refining margins at a 15-year low due to weak demand for
fuels and the company's chief executive said margins would
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 Sunoco
Inc <SUN.N> will permanently shut down a part of its refining
capacity.
And despite market optimism for oil demand, inventories of
oil and refined products remain high.
Analysts in an updated Reuters poll expected the data to
show U.S. crude oil and gasoline inventories rose last week,
while distillate inventories, including heating oil, were
projected to have fallen.
(Additional reporting by Robert Gibbons in New York; Ikuko
Kurahone in London; Alejandro Barbajosa in Singapore; Editing
by Marguerita Choy)
