Oil below $79 as storm fears abate

By Felicia Loo

SINGAPORE (Reuters) - Oil prices eased to below $79 a barrel on Tuesday, as tropical storm Ida, which cut U.S. oil and gas supplies, was downgraded from a powerful hurricane and U.S. crude oil stockpiles were forecast to rise slightly.

A surge in global equities that cemented hopes of an economic recovery and a sharp fall in the U.S. dollar helped temper oil's drop.

U.S. crude for December delivery dropped 39 cents to $79.04 a barrel by 6:23 a.m. British time, after settling up $2 on Monday.

London Brent crude dipped 33 cents to $77.44.

Although oil prices have risen 77 percent so far this year, they are still nearly 47 percent below their high of more than $147 a barrel struck in July last year.

"People are more confident about a global recovery due to positive economic news except for the (U.S.) unemployment numbers which are a lagging indicator," said Tony Nunan, risk management executive at Mitsubishi Corp in Tokyo.

Asian stocks rose on Tuesday after U.S. equities hit a 13-month high and helped dull the allure of government debt, as the Group of 20 finance ministers pledged to keep economic stimulus programs in place until a recovery was assured.

The U.S. economy is projected to expand 2.7 percent next year, the Blue Chip Economic Indicators newsletter for November