Oil up on Russia disruption threat

By Herbert Lash

NEW YORK (Reuters) - Oil prices rose on Wednesday after Russia snapped at a U.S. missile shield agreement with Poland, while a gloomy economic outlook outside the United States helped the dollar resume a march toward 2008 peaks.

U.S. stocks gained on a rise in energy shares and strong results from Hewlett-Packard (HPQ.N), raising hope that demand abroad would support technology spending.

U.S. government debt prices rallied in a safe-haven bid driven by worries about American mortgage finance giants Fannie Mae (FNM.N) and Freddie Mac (FRE.N), but global stocks shrugged off those concerns to move higher.

Oil rose slightly after Russia's angry response to the U.S.-Polish accord raised the threat of a supply disruption from the huge energy producer.

The jump in oil reversed earlier losses that were triggered by a U.S. government report showing the biggest weekly increase in U.S. crude inventories since 2001, thanks to a rebound in imports delayed by Tropical Storm Edouard.

Financial stocks rebounded after Tuesday's sell-off, helping lift along with energy shares the Dow and S&P 500.

"Going into the day some reasonably good earnings gave us a positive bias, and also it seems to me that the commodity stocks, which have been pretty beaten up, are having a very strong rebound," said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.

Uncertainty surrounding a potential bail-out by the U.S. Treasury of Fannie and Freddie kept investors on edge.