* U.S. consumer confidence worsens
* Dollar slips after confidence data
* Expected U.S. oil inventy builds
(Update throughout)
By Ikuko Kurahone
LONDON, Sept 29 (Reuters) - Oil rose above $67 a barrel on
Tuesday, with support coming from the dollar's fall in response
to U.S. data showing weak consumer confidence.
U.S. crude futures <CLc1> rose 38 cents to $67.22 a barrel
by 1440 GMT, reversing an earlier fall by about $1. North Sea
Brent crude futures <LCOc1> were up by 24 cents to $66.78.
"Obviously, people are looking at what is happening to the
dollar now," said Rob Montefusco, oil trader with Sucden
Financial.
U.S. consumer confidence fell unexpectedly in September as
the worst job prospects in 26 years fueled worries over personal
finances, according a report from industry group Conference
Board sid on Tuesday. []
U.S. stocks rose modestly, having turned negative after the
data.
BNP Pariba's senior oil analyst Harry Tchilinguirian said
the weak consumer confidence should be bearish for oil demand.
"The conference board number does not bode well for a
recovery in U.S. oil demand, notably gasoline, but also
indirectly for diesel," he said.
"Consumers will continue to limit driving but also spending
on goods, which in turn will weigh on the demand for freight."
Diesel is used by trucks to carry consumer goods.
After last week's drop of about $8 on concerns over high oil
inventories and weak demand, prices have remained at the bottom
end of a $65-$75 trading range in place since around July.
WEAK DEMAND
The oil market will focus next on two sets of weekly U.S.
oil data due out later on Tuesday and Wednesday.
Many analysts expect increases in crude and fuel inventories
in the United States, the world's top energy consumer, extenting
large builds a week before due to weak demand.
A Reuters poll showed that U.S. crude inventories rose
500,000 barrels in the week to Sept. 25.
Inventories of middle distillate, such as heating oil and
diesel, and gasoline were forecast to have risen 1.1 million
barrels each [].
Ahead of the weekly data, U.S. government said the country's
oil demand fell 4 percent.
Although oil prices have not responded significantly to
heightened tension surrounding Iran, the market has been
watching the moves of OPEC's number two producer in recent
weeks.
Iran test-fired a type of missile which a commander said
could reach any regional target. That followed news of a nuclear
fuel facility in south of Tehran, while major powers remain
worried about the country's nuclear ambitions. []
(Additional reporting by Ramthan Hussain in Singapore;
Editing by William Hardy)
