* Sterling slides as UK PM plans to cut parliamentary time
* Oil prices rise as data show U.S. inventory drawdowns
* Treasury demand robust in auction of 5-year notes
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh (Updates to mid-afternoon in U.S. markets)
By April Joyner
NEW YORK, Aug 28 (Reuters) - A gauge of equities worldwide rose on Wednesday as data showing strong demand for oil helped subdue recession jitters, while sterling tumbled as Britain's prime minister moved to restrict parliamentary time before the country's planned departure from the European Union.
The MSCI All-Country World Index rose 0.24% as U.S. stocks advanced, though the pan-European STOXX 600 ended 0.20% lower. As stocks recovered from early losses, safe-haven assets such as gold and the Japanese yen turned negative on the day, though still near recent highs. U.S. Treasury prices also eased.
Data showing a fall in U.S. crude stockpiles lifted oil prices. The sign of healthy demand quelled to some extent the fears of a severe economic downturn prompted by the inversion of the U.S. Treasury yield curve, which has historically been a highly accurate predictor of a U.S. recession.
"To have de-stocking occur that quickly is viewed as a positive sign for the economy," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, referring to the data on oil inventories. "It's a good enough reason for stocks to bounce today."
Following the data, U.S. crude rose 1.38% to $55.69 per barrel and Brent was last at $60.40, up 1.5%.
The British pound dropped sharply after Prime Minister Boris Johnson set Oct. 14 as the date for the formal state opening of a new session of parliament. The opening limits the time the parliament would sit before the planned date for Brexit on Oct. 31. The news stoked fears of an economically disruptive no-deal departure from the EU.
Sterling was last down 0.50% against the dollar at $1.2226.
On Wall Street, the Dow Jones Industrial Average rose 210.36 points, or 0.82%, to 25,988.26, the S&P 500 gained 15.2 points, or 0.53%, to 2,884.36 and the Nasdaq Composite added 18.78 points, or 0.24%, to 7,845.73.
Despite the bounce in equities, demand for Treasuries remained robust during a $41 billion auction of five-year government debt on Wednesday. Yields on 30-year U.S. Treasuries touched all-time lows earlier in the session and were below those of 3-month bills. The yield curve between 2-year and 10-year notes remained inverted.
Benchmark 10-year Treasury notes last rose 9/32 in price to yield 1.4593%, from 1.49% late on Tuesday.
"It's become very difficult for investors to garner an idea of where we go to next," said Michael Hewson, chief market strategist at CMC Markets. "The weakness in bond yields and the strength in havens speaks to an investor that is becoming increasingly risk-averse."
In currencies, the dollar index rose 0.17%. The Japanese yen weakened 0.23% versus the greenback at 106.00 per dollar.
Among commodities, spot gold dropped 0.03% to $1,542 an ounce, though not far off its six-year peak touched on Monday.
Spot silver added 1.16% to $18.37 an ounce after having hit $18.50, its highest level since April 2017.
Reporting by April Joyner; Additional reporting by Richard Leong and Laila Kearney in New York and Tom Wilson in London; Editing by Steve Orlofsky and Lisa Shumaker