* Oil prices track U.S. equities higher after BP result
* U.S. Fed official says economy shows signs of recovery
* U.S. fuel stocks likely fell last week - Poll
(Recasts, updates prices, market activity throughout; new
byline, dateline, previously LONDON)
By Joshua Schneyer
NEW YORK, Oct 27 (Reuters) - Oil rose toward $80 a barrel
on Tuesday, following U.S. equities higher on optimism the
economy is recovering.
Oil prices rose after three days of declines as investors
were encouraged by strong corporate earnings that boosted
equities prices, and on expectations of further drawdowns in
U.S. fuel inventories.
"Oil is up as the stock market moves higher and people also
expect inventory data to show more big drops in product
stocks," said Phil Flynn, analyst at PFGBest Research in
Chicago.
U.S. crude <CLc1> for December delivery rose 50 cents to
$79.18 a barrel by 12:32 p.m. EDT (1632 GMT), after falling
earlier in the day.
London Brent crude <LCOc1> was up 34 cents at $77.60.
Oil prices have been taking cues from U.S. stock markets as
investors gauge a recovery in the U.S. economy by the strength
of third-quarter corporate earnings.
The Dow Jones industrial average and S&P 500 stock index
both rose, led by oil companies, after BP Plc <BP.N> reported
better-than-expected quarterly results. <.SPX> <>
Data showed U.S. house prices rose for a fourth straight
month. []
A Federal Reserve official said the United States, the
largest world oil consumer, has begun to recover from economic
crisis.
Much of the United States is in the "early stages" of a
recovery, Boston Fed President Eric Rosengren said Tuesday.
[]
A stronger economy may lift fuel demand at a time when
refiners have been operating at lower than normal rates. U.S.
fuel stocks likely fell further last week, according to the
average forecast of eight analysts polled by Reuters ahead of
the government's weekly inventory report Wednesday.
[]
Distillates, including diesel and heating oil, probably
fell 900,000 last week amid colder-than-normal temperatures,
according to the average forecast. Gasoline stocks probably
fell by 300,000 barrels, adding to sharp drawdowns in recent
weeks. Crude stocks probably rose 1.4 million barrels,
according to the average Reuters poll estimate.
Ahead of that report, the American Petroleum Institute will
release its weekly inventory data later Tuesday.
Oil rose on Tuesday in spite of a strengthening U.S.
dollar, which gained more than 0.2 percent against a basket of
other currencies, rising from near a 14-month low. <.DXY>
Crude and the dollar have recently been moving in an
inverse price relation. When the dollar strengthens, crude
becomes more expensive for holders of other currencies.
The dollar, often considered a "safe-haven" investment,
rose in reaction to flagging U.S. consumer confidence, which
fell to lower-than-expected levels in October of 47.7, from a
revised 53.4 in September. The number was the weakest since
July.
U.S. gross domestic product (GDP) data is due to be
released Thursday. Analysts expect data to show that the U.S.
economy grew 3.3 percent in the third quarter.
(Additional reporting by Chris Baldwin in London and Fayen
Wong in Perth; Editing by David Gregorio)
