* U.S. crude eyes 10th straight session of gains
* U.S. API and EIA oil inventory data in focus
* Dollar hits 2009 low, European stocks flat
(Updates prices, stock markets, adds dollar)
By Joe Brock
LONDON, July 28 (Reuters) - Oil firmed above $68 a barrel on
Tuesday, in its most sustained rally since hitting record highs
in July last year, supported by renewed optimism over a global
economic recovery.
U.S. oil futures looked set to rise for the 10th straight
session on Tuesday, based on Reuters continuation charts, in the
most consecutive daily gains since prices hit a high of $147.27
last year.
U.S. crude <CLc1> rose 8 cents to $68.46 a barrel by 0935
GMT, after rising to $68.99 on Monday, the highest since July 2,
spurred by robust U.S. homes sales data.
London Brent crude <LCOc1> rose 26 cents to $71.07 barrel,
off an earlier four-week high at $71.35.
Prospects that the global economy will improve and lift
falling oil demand have helped push crude prices from below $33
a barrel in December.
"I think it is still external factors lifting prices today,
rising stocks markets, weaker dollar and economic optimism after
the U.S. home sales data yesterday," said Carsten Fritsch at
Commerzbank.
European stock markets were largely unchanged on Tuesday,
while the U.S. dollar fell to a 2009 low after Monday's U.S.
data and upbeat outlooks for corporate results. []
Oil company BP <BP.L> reported a mixed set of second-quarter
results on Tuesday. BP is the first of the top tier of Western
oil companies, known as the five Supermajors, to report their
second-quarter results. []
Although BP's second-quarter profits halved, oil and gas
production was up 4 percent and its cost saving target was
raised to $3 billion, from $2 billion. []
INVENTORIES
Investors were awaiting U.S. weekly oil inventories in which
a Reuters poll forecast a 300,000-barrel drop in crude stocks
and a 600,000-barrel fall in gasoline. Distillates stocks are
projected to have risen by a hefty 1 million barrels. []
"The inventory data could definitely be market moving
overnight especially when refiners have shut down some capacity
due to maintenance work," Fritsch said.
The American Petroleum Institute data is scheduled for late
Tuesday, while the report from the U.S. Energy Information
Administration (EIA) is due out on Wednesday.
The chief executive of state oil giant Saudi Aramco
expressed confidence on Tuesday the global fall in oil demand
was temporary and that consumption growth would eventually
resume. []
Khalid al-Falih also said in comments published in the
al-Hayat newspaper that oil output capacity touched 12 million
barrels per day last month when three new oilfield projects
started, one of which is the Shaybah oilfield expansion.
Investors were awaiting with caution Friday's U.S. GDP data,
expected to show a fourth-straight quarter of contraction.
U.S. crude oil is expected to average nearly $73 a barrel in
2010, a Reuters poll showed on Tuesday, as oil demand improves,
albeit at a sluggish pace. []
(Editing by Sue Thomas)
