UPDATE 6-Oil rises as U.S. housing data spurs optimism
* U.S. housing market logs biggest yearly gain since 2006
* Investors await Fed policy meeting outcome, U.S. Q4 GDP
* Coming up: Weekly API oil inventory data, 4:30 p.m. EST
(Recasts with updated prices, market activity; changes byline and dateline, previous LONDON)
NEW YORK, Jan 29 (Reuters) - Oil prices rose 1 percent on Tuesday after U.S. data indicated a strengthening housing market, bolstering hopes of accelerating economic growth and fuel demand.
Financial markets rallied across the board on the data, which showed single-family home prices rose in November for the 10th month in a row. Oil traders have been monitoring economic numbers for signs of a potential improvement in fuel demand.
Markets were also awaiting 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.
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.
Brent crude rose 1 percent to $114.44 per barrel by noon EST (1700 GMT), while U.S. crude gained more than 1.3 percent to $97.76, just off its session high of $97.82.
U.S. crude and RBOB showed some technical signs of being overbought. Both front-month contracts traded above 70 on the 14-day relative strength index (RSI), generally seen as a sign an asset has been overbought and could be set for a turn lower.
U.S. RBOB gasoline futures' RSI traded up 1 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. heating oil futures pushed higher, reaching $3.1085 a gallon during the session, up 4.69 cents, having moved above the 100-day moving average of $3.0680.
U.S. front-month February refined products contracts expire on Thursday.
Traders were also awaiting data on U.S. crude and oil product stockpiles for clues on demand.
A Reuters survey, taken ahead of weekly inventory reports from the American Petroleum Institute and the U.S. government's Energy Information Administration, saw crude stocks rising by 2.6 million barrels on average for the week ended Jan. 25.
Gasoline inventories were forecast to have increased by an average 100,000 barrels for the week.
(Additional reporting by Robert Gibbons in New York and Ron Bousso in London; Editing by Christopher Johnson and Dale Hudson)