* European stocks rise, following gains in Asia
* Dollar falls against basket of currencies
* Some analysts cautious as rally driven by non-fundamentals
(Updates prices, adds quote)
By Alex Lawler
LONDON, July 20 (Reuters) - Oil rose a dollar to above $64 a
barrel on Monday, reaching the highest in almost two weeks, as
equities firmed and the dollar fell on hopes of a global
economic recovery.
The market jumped 6.1 percent last week -- its first weekly
gain in a month -- thanks to a series of positive economic data
and a rally in equities due to better-than-expected U.S.
corporate earnings.
U.S. crude oil for August delivery <CLc1> rose 97 cents to
$64.53 a barrel by 0930 GMT. Prices climbed as high as $64.72,
the highest since July 7. Brent crude for September <LCOc1> rose
95 cents to $66.33.
"The macro inputs should continue to dominate this week and
it will be hard for crude oil to fight the combined strength of
equities and weakness of the dollar," said Olivier Jakob, oil
analyst at Petromatrix.
The MSCI index of Asia Pacific stocks outside Japan climbed
for a fifth session to the highest since late September 2008 on
Monday. European stocks made early gains, while the increase in
risk appetite knocked the dollar. []
Data indicating stronger fuel use in China, the second
largest consumer, also supported prices, traders said. China's
refiners boosted production in June to a record high, the
National Bureau of Statistics said on Friday.
"The market is rather strong," said Christopher Bellew, a
broker at Bache Commodities in London. "It's mainly optimism
about demand and possibly a return of the funds."
In a sign that investors were now more bullish on oil
prices, crude oil speculators on the New York Mercantile
Exchange increased their net long positions in the week to July
14. []
Oil hit a 2009 high of $73.38 on June 30, up from a low of
$32.40 reached in December, boosted in part by supply curbs from
the Organization of the Petroleum Exporting Countries.
Still, with oil prices having rebounded last week, some
analysts are cautioning against excessive bullishness. World oil
demand is contracting this year and is only expected to post
modest growth in 2010.
"As was the case with the March-June upward trend and the
subsequent correction, price action in recent days has been, in
our view, driven by non-fundamentals," said Michael Wittner of
Societe Generale in a report.
"When prices are being driven by non-fundamentals, we are
cautious, and doubly so when trying to call a turn," Wittner
said, adding that technical analysis indicates another downward
move should be expected this week.
(Additional reporting by Fayen Wong; Editing by Anthony Barker)
