UPDATE 6-Oil rises above $79 on strong U.S. housing numbers

                                
   * Fears ease over double-dip recession
                                
* Tropical Storm Bonnie fades in Gulf of Mexico
  
                                
 (Updates prices) 
                                
 By David Turner
                                
 London, July 26 (Reuters) - Oil rose on Monday after a surge
in new U.S. home sales cut the number of houses on the market to
the lowest level in more than four decades, easing fears the
post-crisis economy could slide into a second recession.
                                
 The strong numbers countered a plethora of
weaker-than-expected U.S. economic data in recent weeks.
                                
 Eugen Weinberg, head of commodities research at Commerzbank
in Frankfurt, said data from the world's largest economy -
national economic figures in particular - would probably
dominate oil prices over the coming days.
                                
 "If the U.S. data is surprisingly weak, then people might
get worried about a double dip," he said.
                                
 Sales of new U.S. single-family homes rebounded strongly in
June from the prior month's record low, government data showed
on Monday, driving the number of houses on the market to its
lowest level in nearly 42 years. [ID:nN23137243] 
                                
 Oil prices rose after trading down on the day before the
news. U.S. crude for September delivery <CLc1> rose 13 cents to
$79.11 by 1428 GMT. ICE Brent crude <LCOc1> was up 9 cents at
$77.54. 
                                
 A recent Reuters poll of 31 analysts, banks and government
agencies saw U.S. crude averaging $79.44 in 2010. [O/POLL]
                                
 Oil found further support on Monday from a rise in U.S.
equities in early Wall Street trading <.SPX> [.US]. Oil prices
have correlated strongly with U.S. share prices in recent weeks.
                                
 Crude prices also found support from the continuing theme of
strong second-quarter U.S. corporate earnings. Cigarette maker
Lorillard Inc <LO.N> reported quarterly profit that beat
expectations on Monday.  
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For a technical view of oil prices, see: [ID:nSGE66P00H] 
For Reuters poll on prices click         [ID:nLAE002151]
Table                                    <POLL70>
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   News that Tropical Depression Bonnie had faded overnight
limited oil price gains, although the threat of the storm did
take a bite out of production in the Gulf of Mexico oil area.
[ID:nN24189512]
                                
 The U.S. National Hurricane Center said on Monday that no
tropical cyclone formation was expected during the next 48
hours. [ID:nN26195720]
                                
 Forecasters have said the 2010 Atlantic hurricane season,
which runs from June 1 to Nov. 30, could be the worst since
2005, when Hurricanes Katrina, Rita, and Wilma caused havoc in
the Gulf Coast, damaging oil rigs and refineries and forcing
sharp cuts in production. 
                                
 In China, Dalian Port Co. <2880.HK> resumed operations at
two of its oil berths, and its main 300,000 tonnage berth is
expected to reopen soon, the company said on Sunday, after a
fire at the port a week ago shut the berths down.
                                
 In a sign of bullishness on oil prices, open interest
positions increased for September $85 and $90 call options on
Friday from a week before as crude prices rose to near $80 a
barrel before ending the session slightly lower. [ID:nN23626523]
                                
 (Additional reporting by Fayen Wong in Perth; editing by
Jane Baird)