* European stocks advance, U.S. stock index futures rise
* Dollar falls against basket of currencies
* Algeria oil min says fundamentals do not justify prices
(Updates prices, adds quote from Algerian oil minister)
By Alex Lawler
LONDON, July 20 (Reuters) - Oil rose to around $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 for August <CLc1> rose 54 cents $64.10 a barrel
by 1251 GMT. Prices climbed as high as $64.90, the highest since
July 7, earlier in the session. Brent crude for September
<LCOc1> added 65 cents to $66.03.
"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.
"Supply is very high with respect to demand and stocks are
still at a very high level," said Chakib Khelil, the oil
minister for OPEC member Algeria, on a visit to Milan.
"If you look at the fundamentals, they do not really justify
these prices."
(Additional reporting by Fayen Wong in Perth and Svetlana
Kovalyova in Milan; editing by Anthony Barker)
