UPDATE 7-Oil jumps 4 pct on equities rally, 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
                                
 By Gene Ramos
                                
 NEW YORK, May 27 (Reuters) - Oil jumped 4 percent on
Thursday and posted its biggest two-day gain since mid-August
as China's assurance about its euro-zone investments sparked a
global rebound in equities and fed more bets for riskier
assets.
                                
 Oil also rose as a forecast for an intense Atlantic
hurricane season fueled fears of disruption in U.S. supplies,
also prompting speculative buying.
                                
 Prices were already up more than 3 percent before the
government released its initial forecast for this year's storm
season.
                                
 "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.
                                
 The day's rally was a follow-through of Wednesday's heady
advance that was supported by encouraging demand for U.S. fuels
last week as reported by the government, even though domestic
crude stocks continued to rise. [EIA/S]
                                
 U.S. crude futures for July delivery <CLc1> settled $3.04
higher, up 4.25 percent, at $74.55 a barrel. That extended
gains in two days to 8.4 percent, the biggest since a two-day
advance on Aug. 18-19. July crude has recovered from Tuesday's
low of $67.15, the contract's lowest since July 2009.
                                
 ICE Brent July crude futures <LCOc1> gained $2.92, or 4
percent, to settle at $74.66. Brent also gained for two
straight days, advancing 7.3 percent in that period, after nine
losing sessions.
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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 about 3 percent, a primary boost for
crude futures as it signals 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]
                                
 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 outlook for the storm season that begins next
Tuesday, the National Oceanic and Atmospheric Administration
forecast 14 to 23 named storms, with eight to 14 turning 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]
                                
 Crude's gains came amid a broad-based rebound in the
19-commodity Reuters-Jefferies CRB index <.CRB> by 1.7 pecent,
taking gains over two days to 3.4 percent, the biggest rise
since September and coming after a reversal from Tuesday's
8-1/2 month low. [ID:nN27550092]
                                
 Oil traders turned a little cautious earlier after data
showed that the U.S. economy grew at a 3.0 percent annual rate
in the first quarter, a slower pace than previous estimate of
3.2 percent, as business investment slackened. [ID:nN27259780]
                                
 On Wednesday U.S. crude rose 4 percent, its biggest one-day
percentage gain in nearly eight months, after EIA data showed
increases in U.S. demand for 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 to measure economic activity.
  (Additional reporting by Robert Gibbons in New York; Ikuko
Kurahone in London; and Alejandro Barbajosa in Singapore)