* U.S. consumer confidence up in October-Conference Board
* U.S. crude stocks likely rose last week-Poll []
* Oil's inverse correlation to dollar off 14-mnth high
* Coming Up: U.S. API oil inventory weekly report 1630 EDT
(Recasts, updates prices, market activity; new byline, changes
dateline, previously LONDON)
By Joshua Schneyer
NEW YORK, Oct 26 (Reuters) - Oil rose slightly, hovering
above $82 a barrel on Tuesday, getting a boost from growing
U.S. consumer confidence, which can help drive fuel demand,
partly offset by a firming dollar that may cut demand abroad.
After swings between negative and positive territory, U.S.
crude for December <CLc1> was up 20 cents at $82.72 a barrel by
12:02 p.m. EDT (1602 GMT), extending gains from two previous
sessions.
ICE Brent <LCOc1> rose 13 cents to $83.67.
U.S. consumer confidence rose more in October than analysts
polled by Reuters had expected, although it remained near
historic lows, the Conference Board reported. []
A sharply firmer dollar, which strengthened 0.7 percent
against a basket of foreign currencies on Tuesday <.DXY>, could
crimp demand for dollar-priced oil abroad.
Commodities and currency markets awaited results of a U.S.
Federal Reserve meeting next week. The Fed is expected to
approve purchases of government debt, or quantitative easing,
to help pull the economy out of the doldrums.
With market expectations for easing already running high,
how aggressively the Fed moves are may bear heavily on
markets.
"The consumer confidence data was okay, not bearish, and
prevented crude from sliding," said Andy Lebow, broker at MF
Global in New York.
"But we're trapped in range here as the market awaits Fed
meeting next week and what it will bring."
Oil has mostly been trading in the $75 to $85 a barrel
range since May.
"The wild card here is if the Fed action doesn't match the
QE amount now being anticipated, there could be a short-term
bounce in the dollar and that could mean a sell-off for crude
futures," said Richard Ilczyszyn of Lind-Waldcock in Chicago.
Analysts polled by Reuters expect weekly U.S. stocks data
to show petroleum inventories rose in the top consumer last
week, by an average 1.4 million barrels, on more crude imports.
Gasoline stocks are forecast to have risen by 500,000 barrels.
[]
"The U.S. oil data will be a reminder that the oil market
is well supplied and that prices over $80 per barrel are not
driven by fundamentals," said Carsten Fritsch, an oil analyst
at Commerzbank in Frankfurt.
U.S. oil stocks data will be released late Tuesday by
industry group the American Petroleum Institute (API) while
official weekly data from the U.S. Energy Information
Administration is due on Wednesday morning.
Analysts forecast a more bullish draw in U.S. distillate
stocks, which have been well above five-year averages this
year. They likely fell by 1.9 million barrels in the week to
Oct. 22, a Reuters poll showed.
U.S. refiners probably shipped more fuel to Europe amid
ongoing worker strikes in France against pension reform.
Strikes affect key oil terminals and refineries and have
squeezed European fuel supplies.
Walkouts ended at several French plants on Tuesday, and
fuel was leaving four of France's 12 oil refineries. A strike
at the key southern Fos-Lavera oil terminals was still blocking
60 oil tankers, including 40 carrying crude, the port of
Marseilles said. []
DOLLAR CORRELATION EASES
A sharp rise in the dollar, which firmed after U.S.
consumer confidence data, failed to pull oil prices into
negative territory.
A stronger dollar has tended to coincide with a drop in oil
prices and those of other commodities. Oil's inverse
correlation to the dollar had risen to its highest level in 14
months early Tuesday, before easing as U.S. markets opened.
[]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the inverse correlation between U.S. crude
and the dollar's value against a basket of currencies:
http://link.reuters.com/gac32q
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The inverse correlation has grown over the past two years,
partly because investors have been buying emerging market
shares and commodities when the dollar drops, and unloading
them when it firms.
(Additional reporting by Christopher Johnson in London, Gene
Ramos in New York and Alejandro Barbajosa in Singapore; Editing
by David Gregorio)
