* U.S. home prices, consumer confidence short of estimates
* U.S. crude, heating oil inventories seen down last week
* Coming up: API U.S. inventory data due Wednesday
(Recasts, adds details of U.S. inventory polls)
By Jeffrey Kerr
NEW YORK, Dec 28 (Reuters) - Oil rose on Tuesday,
approaching two-year highs set a day earlier, on expectations
weekly U.S. data will show another draw in crude stockpiles as
companies reduce inventories for year-end tax considerations.
Analysts polled by Reuters forecast a 2.9-million-barrel
draw in U.S. crude stockpiles for the week to Dec. 24, as tax
incentives prompt firms to cut inventories. []
U.S. crude stockpiles fell 19 million barrels over the
previous three weeks, the largest three-week drop since 1998.
U.S. crude for February delivery <CLG1> settled 49 cents
higher at $91.49 a barrel in light holiday trade, a day after
touching $91.88, the highest crude price since October 2008.
In London, ICE Brent crude <LCOG1> settled 53 cents higher
at $94.38 a barrel.
U.S. January RBOB <RBF1> settled at $2.4056 a gallon, down
1.53 cents or 0.63 percent, while heating oil <HOF1> settled
0.77 cent higher at $2.5243 a gallon.
U.S. crude's gains erased much of Monday's 51-cent loss.
Trading was thin, with total NYMEX crude volumes just over
183,000 contracts late in the day, well below the 30-day
average of 600,000.
"I think the market is pretty quiet on volume, but, that
said, this morning's price action seems to be more reflective
of a positive tone than a negative tone," said Michael Korn,
president of Skokie Energy in Princeton, New Jersey.
"I'm thinking it's more like day traders are playing it
from the long side."
U.S. crude found early support as the dollar slipped
against a basket of currencies, but then gave back some gains
after U.S. economic data came in weaker than expected.
As the day wore on, however, the currency and crude markets
diverged. A weaker dollar tends to support prices for
commodities denominated in the greenback.
"It's always interesting when markets diverge," said Tim
Evans, energy analyst for Citi Futures Perspective in New York,
adding crude got a lift from expectations of draws in heating
oil and crude stocks, rather than any economic influences.
U.S. consumer confidence unexpectedly deteriorated in
December, hurt by mounting worries about the job market,
according to a report released by the Conference Board. The
data weighed on equities markets. []
Single-family home prices fell for a fourth straight month
in October, pressured by a supply glut, home foreclosures and
high unemployment, the Standard & Poor's/Case-Shiller composite
index showed. []
U.S. INVENTORIES
In addition to the draw in crude inventories, analysts
polled by Reuters forecast a 1.5-million-barrel build in
gasoline inventories and a 500,000-barrel drop in distillate
stockpiles.
The weekly data will be delayed by one day due to
Christmas, with the American Petroleum Institute report due on
Wednesday. The U.S. Energy Information Administration's weekly
report will be issued on Thursday morning.
Oil has rallied 35 percent from lows struck in May, and is
up roughly 15 percent from the end of 2009.
A rally across financial markets took hold in earnest
around September, spurred by the U.S. Federal Reserve's latest
round of quantitative easing, a weakened dollar and rising
demand.
"Data in recent weeks have been supportive of the stocks
and commodity markets globally. The U.S. will avoid a
double-dip. The Asian region including Japan looks a little bit
better, with its industrial production finally showing an
increase," said David Cohen, director of Asian economic
forecasting at Action Economics.
"I think a lot of people are expecting prices to turn
higher towards $100 a barrel next year."
The Organization of Arab Petroleum Exporting Countries,
some of whose members also belong to OPEC, met in Cairo at the
weekend, when leading exporter Saudi Arabia reiterated its
preference for a $70-$80 price range. Others said $100 would be
fair and the global economy could withstand it.
Oil has also found some support from cold weather across
the United States and Europe. A blizzard across the U.S. East
Coast this week was viewed as mixed for markets as it bolstered
heating demand but hit travel consumption by shutting airports
and slowing road travel.
(Reporting by Jeffrey Kerr and Matthew Robinson in New York;
Robert Gibbons in Houston; Barbara Lewis in London; Seng Li
Peng in Singapore; Editing by Dale Hudson)
