UPDATE 6-Oil rallies nearly 4 pct on equities, storm forecast

                                
 * NOAA sees 8-14 hurricanes, most since record 15 in 2005
                                
 * U.S. Q1 GDP up, but revised down to 3 pct
                                
 * U.S. crude tacks premium vs Brent, first since mid-April
                                
 * Coming up: Consumer sentiment, personal income data Fri
                                
 (Recasts, updates prices, market activity, changes byline,
changes dateline, previously LONDON)
                                
 By Gene Ramos
                                
 NEW YORK, May 27 (Reuters) - Crude oil prices surged nearly
4 percent on Thursday, on track to post the biggest two-day
gain since mid-August, as a global rebound in equities and
fears that an intense Atlantic hurricane season could disrupt
U.S. supplies attracted fresh buying.
                                
 Prices were already up more than $2 before the    
government released its initial forecast for this year's      
Atlantic hurricane season.
                                
 The day's gains added to encouraging demand data for U.S.
fuels last week that the government reported on Wednesday, even
though domestic crude stocks continued to rise. [EIA/S]
                                
 "The NOAA forecast calling for an intense Atlantic
hurricane season this year is having an impact on oil futures,
with storm premium being factored into prices," said Phil
Streible, senior market strategist at Lind-Waldock in Chicago.
                                
 "This adds to the earlier boost that came from higher
equities. We've also seen a weakening of the dollar ... that
has encouraged speculators to buy in," Streible said.
                                
 U.S. crude futures for July delivery <CLc1> rose $2.58, or
3.6 percent, to $74.09 a barrel, by 1:04 p.m. EDT (1705 GMT).
                                
 ICE Brent July crude futures <LCOc1> gained $2.65, or 3.7
percent, at $74.39.
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  FACTBOX on hurricane forecasts        [ID:nHURRICANE]
  FACTBOX on the impact of big storms   [ID:nN27378096]
  GRAPHIC on the correlation between crude and equities:
                                
  http://link.reuters.com/ceq76k
  TECHNICALS on US oil rebound          [ID:nSGE64Q00H]
  TAKE A LOOK on Reuters Energy Summit  [ID:nSGE64N1I1]
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 At one point, U.S. crude gained as much as 24 cents against
Brent, hoisting a premium for the first time since April 12. It
fell to a discount as deep as $6.57 in mid-May due to a
build-up in crude stored in Cushing, Oklahoma, the delivery hub
for oil futures traded on the New York Mercantile Exchange.
                                
 But Wednesday's data from the U.S. Energy Information
Administration showed inventories at the hub slipped in the
week to May 21 for the first time in nine weeks, narrowing the
WTI/Brent spread. <CL-LCO1=R>
                                
 However, on Thursday industry data provider Genscape said
that inventories there hit another record high in the week to
May 25, rising 478,000 barrels to 39.9 million barrels, from a
week earlier. [ID:nN27272339]
                                
 U.S. equities jumped more than 2 percent, a primary boost
for crude futures as it indicates oil demand could improve,
after China denied a report that it was reviewing its holdings
of euro-zone sovereign bonds due to the region's debt crisis.
[.N] [MKTS/GLOB] [.EU]
                                
 Later on, a forecast by the top U.S. government climate
agency that the Atlantic storm season may be the most intense
since 2005, when Hurricane Katrina devastated Gulf of Mexico
energy facilities, prompted further buying of oil futures.
                                
 In its first forecast for the storm season that begins next
Tuesday, the National Oceanic and Atmospheric Administration
forecast 14 to 23 named storms, with eight to 14 developing
into hurricanes, nearly matching 2005's record of 15.
[ID:nN2798815]
                                
 The forecast comes as BP <BP.L> continued its latest
attempt to plug a ruptured oil well on the Gulf of Mexico.
[ID:nN26238003]
                                
 Oil traders turned a little cautious earlier after data
showed that the U.S. economy grew at a slower pace than
previously estimated in the first quarter as business
investment slackened. U.S. gross domestic product expanded at a
3.0 percent annual rate, the Commerce Department said, instead
of the 3.2 percent pace reported last month. [ID:nN27259780]
                                
 "Macro economic data is absolutely the most important, also
confidence in the recovery is reflected in prices for
equities," Christopher Bellew with Bache Commodities said.
"Today, U.S. demand does still play a part."
                                
 On Wednesday U.S. crude rose 4 percent, its biggest one-day
percentage gain in nearly eight months, after data from the
Energy Information Administration showed increases in U.S.
demand for as gasoline and diesel. [EIA/S]
                                
 Demand for gasoline rose ahead of this week's Memorial Day
holiday weekend that kicks off the U.S. summer driving season.
Particularly bullish also was a rise in diesel demand, noted
Barclays Capital analyst Paul Horsnell.
                                
 As diesel is used for large trucks, its demand is often
used as a gauge of the health of economic activity.
                                
 (Additional reporting by Robert Gibbons in New York; Ikuko
Kurahone in London; and Alejandro Barbajosa in Singapore;
editing by Lisa Shumaker)