* EIA reports big rise in U.S. crude stocks
* Weaker dollar, firmer equities support oil
* Crude at top of range, some see chance of breakout
* Coming Up: U.S. January factory orders due Thursday
(Repeating to include link to graphic; updates prices)
NEW YORK, March 3 (Reuters) - Oil rose toward $81 a barrel
on Wednesday as a weaker dollar and rising equity markets
outweighed a U.S. government report showing a large rise in
crude inventories.
U.S. crude stocks rose by 4.1 million barrels, the Energy
Information Administration (EIA) said, more than the 1.4
million barrel increase forecast. Gasoline stocks rose 700,000
barrels, slightly more than expected. []
"The report is not making any difference today because
crude is looking at the stock market which is moving up and the
weakness in the dollar which is adding more support to the
market," said Mike Zarembski, senior commodities analyst at
optionsXpress in Chicago.
U.S. crude <CLc1> rose $1.17 at $80.85 a barrel by 1:56
p.m. (1856 GMT), trading as high as $81.23 intraday. In London,
Brent crude <LCOc1> gained $1.06 at $79.24.
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For a graphic on crude oil's trading range, click on:
http://graphics.thomsonreuters.com/310/OIL_RNGBS0310.gif
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Crude oil is trading within a narrow band of $78 to $80 a
barrel, focusing attention on whether the market is likely to
break out of that range.
Oil in New York on Tuesday hit a seven-week intraday high
of $80.95, within sight of Jan. 11's 15-month high of $83.95.
"Crude oil's charts look fairly constructive," said Edward
Meir at MF Global in a report. "Given that we are in shouting
distance of the January 2010 highs, we cannot exclude a test of
those levels."
The EIA report followed data from industry body the
American Petroleum Institute (API) on Tuesday, which showed a
4.1 million-barrel drop in distillate supplies and a 2.7
million barrel rise in crude inventories.
The euro rose against the dollar after Greece pledged $6.5
billion in pay cuts and tax increases to reduce its deficit,
easing worries about the country's debt crisis.
A weaker dollar tends to support oil prices, making
dollar-denominated commodities cheaper for other currency
holders.
Wall Street rose after data on the labor market and the
U.S. services sector encouraged investors who had been
uncertain about the pace of economic recovery.
The Institute for Supply Management's services gauge rose
in February at its fastest pace in more than two years, and the
ADP Employment report showed U.S. private employers shed fewer
jobs last month, suggesting the labor market may be on the
mend.
Oil markets have been monitoring economic data for signs of
recovery and a potential rebound in energy demand.
The all-important U.S. nonfarm payrolls data is due on
Friday.
(Reporting by Alex Lawler in London, Edward McAllister in New
York, Alejandro Barbajosa in Singapore; editing by Jim
Marshall)
