* Oil bounces back above $60 on the back of equities rally
* But worries about global economy limit gains
* Crude stocks expected to fall for the 6th straight week
(Updates prices)
By Fayen Wong
PERTH, July 14 (Reuters) - Oil reversed the previous
session's losses and rose above $60 a barrel on Tuesday, thanks
to improved sentiment amid a stock market rally, but lingering
fears of the deep and long recession capped oil's gains.
U.S. crude for August delivery <CLc1> rose 52 cents to
$60.21 a barrel by 0656 GMT. The contract finished down 20
cents at $59.69 on Monday, after briefly touching its lowest
level in almost two months.
London Brent crude <LCOc1> rose 54 cents to $61.23.
"Investors are still nervous about going into the
commodities markets in a big way. One day of gains on the
equities markets isn't going to be enough for investors to
change their sentiments entirely," said Ben Westmore, a
commodities analyst at the National Bank of Australia.
"Market players are still trying to reassess how long this
recovery is going to take and it will probably need a good week
of gains on the stock markets before their appetite for
commodities investment increases."
Asian stocks bounced on Tuesday as a rally in U.S.
financial shares helped Japan break a 10-session losing streak,
while also reversing a little of the recent safe-haven rush
into the yen. []
Expectations that U.S. crude stocks fell last week also
lent some support to oil prices.
U.S. crude oil inventories likely fell last week for the
sixth straight week, a Reuters survey of nine analysts on
Monday showed ahead of weekly inventory data, with some
analysts expecting imports to be down amid weak demand. []
The industry group American Petroleum Institute (API) will
release its report later on Tuesday, while a U.S. government
agency, the Energy Information Association, will issue its own
report on Wednesday.
Oil's recent losses, which have partially reversed the 40
percent spike of last quarter, come amid growing macroeconomic
pessimism as a slew of economic data released across the globe
has shown that an economic recovery would probably be patchy,
if it comes at all, later this year.
Analysts said uncertainties over plans by U.S. regulators
to rein in excessive speculation in energy and commodity
markets were also chipping away at investors' appetite.
[]
"Such moves have served to instil a fear factor among
commodity market participants, resulting in a sharp reduction
in net long positions in the crude oil market," Barclays
Capital said in a Monday report. Key economic data expected on
Tuesday include U.S. business inventories for May, U.S.
producer prices and retail sales data for June as well as the
API weekly oil report.
A slew of U.S. corporate earnings including banking giant
Goldman Sachs <GS.N> would also keep investors at bay and cap
oil prices near $60 a barrel.
Separately, Nigeria's main militant group widened its
offensive against Africa's biggest oil producer on Monday
despite the release of its suspected leader, raising concern
there might be further attacks. []
(Reporting by Fayen Wong; Editing by Clarence Fernandez)
