* Better-than-expected BP earnings boost energy sector
* U.S. fuel inventories likely fell last week - Poll
* Dollar firms and equities fall, limiting crude's gain
(Recasts and updates throughout)
By Joshua Schneyer
NEW YORK, Oct 27 (Reuters) - Oil rose above $79 a barrel on
Tuesday as rising gasoline demand in the United States helped
investors shrug off a drop in consumer confidence in the
world's biggest energy user.
Crude gained even as the U.S. dollar strengthened against
other currencies in afternoon trade.
A report from MasterCard SpendingPulse on Tuesday showed
U.S. gasoline demand rose last week, coming in 5.1 percent
higher than year-ago levels and 0.1 percent higher than in the
previous week. []
"Weekly gasoline figures showed demand jumped last week,
and that may begin to eat away at fuel inventories at a time
when refiners have been processing less crude," said Gene
McGillian of Tradition Energy in Stamford, Connecticut.
Most analysts expect government data due out Wednesday to
show U.S. fuel inventories fell last week on lower-than-normal
refining activity, according to analysts polled by Reuters.
U.S. crude <CLc1> for December delivery settled up 87 cents
at $79.55 a barrel.
London Brent crude <LCOc1> was up 45 cents at $77.71.
The dollar, often considered a "safe-haven" investment,
rose Tuesday in reaction to flagging U.S. consumer confidence,
which fell to a lower-than-expected 47.7 point in October, from
a revised 53.4 in September. Consumer confidence was the
weakest since July. []
As the dollar strengthens, crude becomes more expensive for
holders of other currencies.
Distillate stocks, including diesel and heating oil,
probably fell 900,000 in the United States last week amid
colder-than-normal temperatures, according to analysts polled
by Reuters. Gasoline stocks probably fell by 300,000 barrels
and crude probably rose 1.4 million barrels, according to the
average analyst estimate.
Private industry group American Petroleum Institute will
release its own weekly inventory data later Tuesday.
Better-than-expected quarterly earnings from oil giant BP
Plc <BP.N> helped boost confidence in industrial sector
companies, sending their shares higher. <.SPX> <>
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. Data showing
lower growth could prompt investors to shun riskier
commodities, whose prices have rallied this month.
Iran seeks major changes to a United Nations nuclear fuel
deal before it agrees to send its low-enriched uranium outside
the country for processing, Iranian state media reported
Tuesday. []
Tense negotiations between Western powers and OPEC's No. 2
oil producer over its uranium enrichment have helped to push
oil prices higher.
OPEC oil ministers this week raised the prospect of
boosting oil production when OPEC meets in December if crude
stocks fall fast, although an Iranian official said there was
no indication OPEC should boost supplies soon. []
(Additional reporting by Gene Ramos in New York, Chris Baldwin
in London and Fayen Wong in Perth; Editing by Christian
Wiessner)
