* European equities at four-week high
* Euro zone industrial output jumped in April-Eurostat
* Japanese manufacturer sentiment improves in Q2
* For a technical view, click: []
(Updated throughout, previous dateline SINGAPORE)
By David Sheppard
LONDON, June 14 (Reuters) - Oil prices rallied by 2 percent
to $75 a barrel on Monday as renewed optimism about the global
recovery boosted the outlook for fuel demand and sent Asian and
European stock markets to their highest level in four weeks.
U.S. crude for July <CLc1> rose to a high of $75.51 a barrel
and was up $1.57 at $75.35 a barrel at 0909 GMT, still down 13
percent from a 19-month high above $87 in early May.
ICE Brent <LCOc1> gained $1.40 to $75.75.
The euro <EUR=> rose to a one-week high against the dollar,
which was down by about 1 percent against a basket of currencies
<.DXY>. A weaker dollar tends to boost the price of commodities
priced in the U.S. currency as they become more expensive for
other currency holders.
"Some of the fears about the European debt crisis are
easing," said Tony Nunan, a risk manager with Mitsubishi Corp.
"If the dollar is falling, it means that people are more
relaxed to take on risk. People have believed for a long time
that the second half (of the year) will be better than the first
half," Nunan said.
Euro zone industrial output in April surged year-on-year
more than in any month in almost two decades, data showed on
Monday, in a sign economic recovery could be gathering pace.
The European Union's statistics office Eurostat said
industrial production in the 16 countries using the euro rose
0.8 percent month-on-month for a 9.5 percent year-on-year gain.
European leaders will meet on Thursday to set out proposals
to convince financial markets they can contain a debt crisis by
agreeing to tighten economic policy coordination and strengthen
budget discipline. []
Oil prices posted just their second weekly gain since early
May last week, with U.S. crude prices rising by more than 3
percent as strong Chinese export data signalled global growth
remains robust and healthy industrial energy demand in the
world's second largest oil consumer.
OPTIMISM CARRIES ON
Oil consumption in the U.S. is recovering, helped by the
seasonal summer peak in gasoline use. The nation's crude
inventories fell more than expected in the last week of June,
trimming a surplus that has prevailed for almost two years.
Crude fell to below $65 a barrel in mid-May as the European
debt crisis unfolded.
Money-managers raised the number of bets crude prices will
rise last week, the U.S. Commodity Futures Trading Commission
(CFTC) said on Friday, marking the first time long positions
have increased since the start of the euro zone crisis.
[]
U.S. crude would have to settle above $76, a level reached
in intraday trade last week for the first time in a month, for
prices to extend their upward march, Nunan said, based on
technical chart analysis.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic managed money positions in crude oil futures
click:
http://graphics.thomsonreuters.com/10/CFTC_Crude110610.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
While demand is rising, U.S. supplies could be tightened by
BP's Gulf of Mexico oil spill by the end of the summer,
according to JP Morgan, following U.S. President Barack Obama's
decision to delay new offshore drilling. []
"With the U.S. drilling ban likely to hit supplies from the
third quarter onwards, and demand expected to rise seasonally
between now and August, we feel that seasonality and
fundamentals are moving towards a price rebound," JP Morgan
analyst Lawrence Eagles said in a report.
"Overall, while risks remain, we believe that the oil market
will start to tighten up over the coming months."
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by Alison Birrane)
