* European stocks advance, U.S. stock index futures rise
* 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 its highest level in almost two
weeks, as equities firmed and the dollar fell on expectations 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 $1.10 to
$64.66 a barrel by 1143 GMT. Prices climbed as high as $64.90,
the highest since July 7. Brent crude for September <LCOc1>
added $1.00 to $66.38.
"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.
Asian shares outside Japan hit a 2009 high. European shares
were up more than 1 percent. Wall Street looked set to join in,
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 technical analysis indicated another downward move
should be expected this week.
(Additional reporting by Fayen Wong; editing by James Jukwey)
