By Kate Gibson, MarketWatch NEW YORK (MarketWatch) -- Oil prices on Tuesday held near neutral above $79 a barrel as investors tracked the recent winning streak in the U.S. stock market against indications of weak demand. Energy traders took some cues from the equities market, with U.S. stock futures on Tuesday pointing to opening gains on Wall Street. Stocks have risen the past three sessions, reducing worries that the recovery is in jeopardy. "Crude is showing strength on a new evaluation of our economy; growth is going to be slow, but we're taking away that double-dip scenario," said Jeffrey Friedman, senior market strategist at Lind-Waldock. The crude-oil futures contract for September delivery gained 60 cents to $79.60 a barrel in electronic trade on the New York Mercantile Exchange. The contract held flat to end at $78.98 on Monday. Should the S&P 500 Index (SPX 1,115, +12.35, +1.12%) close above 1,122 to 1,125 two days in a row, then crude would likely follow suit and close above $80.50, Friedman predicts. Investors should also keep their eyes trained on the euro zone, the analyst advised, saying that if the euro falls sharply, it's a signal that people are afraid. "People are willing to take risks as long as the euro is rallying and the dollar is weaker. In trading you should look at more than one market to get confirmation," Friedman said. Crude-oil inventories, however, have expanded or declined less than expected in recent weeks, indicating lackluster demand. The American Petroleum Institute reports weekly supply data later Tuesday, while the Energy Department issues its own report Wednesday. Support for crude comes from the demand side, not the supply side, Friedman stressed.

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