* U.S. housing market logs biggest yearly gain since 2006
* Investors await Fed policy meeting outcome, U.S. Q4 GDP (Updates with API data paragraphs 12-17)
By Gabriel Debenedetti
NEW YORK, Jan 29 (Reuters) - U.S. crude oil rose more than 1 percent on Tuesday, exceeding gains in Brent crude, after strong U.S. housing market data bolstered confidence that economic growth and fuel demand were accelerating.
Financial markets rallied across the board when the S&P/Case Shiller composite index of 20 metropolitan areas showed single-family home prices rose in November for the 10th month in a row and posted its biggest year-on-year rise since August 2006.
Oil traders have been monitoring economic numbers for signs of a potential improvement in fuel demand.
Markets awaited the outcome of a two-day Federal Reserve policy meeting as well as first estimates for fourth-quarter gross domestic product in the United States on Wednesday.
Brent crude rose 88 cents to settle at $114.36 per barrel, having reached $114.49, its highest price since Oct. 16, 2012, while U.S. crude gained nearly 1.2 percent to settle at $97.57, off its session high of $97.82. Trading volume was heavy, with U.S. crude 33 percent above its 30-day moving average and Brent more than 20 percent above than its own 30-day moving average.
The Fed has said it expects to keep short-term U.S. interest rates exceptionally low to help support the economy. The low rates have helped push up oil prices, as investors pour cash into riskier asset classes.
“Economic optimism ahead of the Fed meeting and some technical momentum with U.S. crude able to stay above $95 have U.S. crude higher,” said Phil Flynn, analyst at Price Futures Group in Chicago, referring to the housing data.
U.S. crude and RBOB showed some technical signs of being overbought. The 14-day relative strength index (RSI) in both front-month contracts traded above 70, which is generally seen as a sign that an instrument is overbought and could be set for a turn lower.
U.S. RBOB gasoline futures’ traded up 1.3 percent, adding to gains of 2 percent on Monday, following news Hess Corp plans to close its 70,000-barrels-per-day Port Reading, New Jersey refinery.
The move stirred concerns about supplies to the region, which has seen a series of plants shut due to poor margins over the past three years. The region is expected to rely more heavily on imported crude as well as shipments from the Gulf Coast after the Port Reading plant closes in February.
U.S. front-month February refined products contracts expire on Thursday.
U.S. crude stocks rose 4.2 million barrels last week, the American Petroleum Institute (API) reported on Tuesday.
Crude stocks at Cushing fell 15,000 barrels, according to the API, while gasoline stocks rose 2.4 million barrels and distillate stocks fell 1.8 million barrels, the API said.
Analysts had expected U.S. crude stocks to rise 2.6 million barrels, according to a Reuters survey of analysts ahead of weekly inventory reports from API and the U.S. government’s Energy Information Administration (EIA).
Gasoline stocks were expected to fall 100,000 barrels and distillate stocks were expected to fall 1.1 million barrels.
The EIA weekly inventory report is due on Wednesday at 10:30 a.m. EST (1530 G MT).
Additional reporting by Robert Gibbons in New York and Ron Bousso in London; Editing by Christopher Johnson, Dale Hudson and Alden Bentley