Oil rises over $114 as dollar falls

NEW YORK (Reuters) - Oil prices rose about 1.5 percent on Tuesday as part of a broad commodities rebound triggered by weakness in the U.S. dollar.

U.S. crude gained $1.66, or 1.47 percent, to settle at $114.53 a barrel while London Brent crude rose $1.31 to $113.25 a barrel.

"On crude, trend-line support is holding and the dollar is exhausted and falling," said Mark Waggoner, president of Excel Futures in Huntington Beach, California.

Gold and other commodities also pushed higher.

A weak dollar helps boost commodities prices by raising the purchasing power of buyers using other currencies.

The dollar index dropped 0.4 percent Tuesday in its worst one-day fall since mid-July.

Crude's gains reversed losses earlier in the day as Tropical Storm Fay moved inland in Florida, sparing offshore oil rigs in the Gulf of Mexico.

Oil prices are down more than 20 percent since the July 11 peak over $147 a barrel, pulled lower by concerns over a global slowdown in energy demand.

Venezuela's oil minister told Reuters on Tuesday the OPEC-member nation could recommend the cartel cut production if oil prices keep falling.

Despite the losses, crude remains up about 15 percent so far this year and nearly six-fold since 2002 in a rally sparked by rapid economic growth in China.

Dallas Federal Reserve Bank President Richard Fisher said on Monday that Chinese economic growth still can deliver a potentially massive boost to global energy demand with clear implications for long-term oil prices.

Dealers said the next key indicator for the market would be U.S. oil inventory data from the Energy Information Administration (EIA) Wednesday morning.

Analysts expected the data to show an 800,000 barrel increase in U.S. crude oil inventories as imports delayed by recent storms rebounded.

(Reporting by Richard Valdmanis in New York, Seng Li Peng in Singapore, Ikuko Kao in London; Editing by Jim Marshall)