* Oil hits highest since July 2
* European stocks rise after gains in Asia
* NYMEX crude speculators cut net long positions
(Previous PERTH, updates prices, adds quotes)
LONDON, July 27 (Reuters) - Oil rose for a third session on
Monday to hit the highest in more than three weeks near $69 a
barrel as stock markets gained on hopes of an economic recovery
that would boost fuel demand.
European stocks advanced following gains in Asia, where
equities rose for the ninth day in 10 as investors focused on
better corporate earnings and moving money into riskier, higher
yielding assets. []
U.S. crude <CLc1>, which has risen in eight of the last nine
trading days, climbed 69 cents to $68.74 by 0800 GMT. Prices hit
an intraday high of $68.99, the highest since July 2. Brent
crude <LCOc1> rose 79 cents to $71.11.
"Oil's rally has again been supported by external factors,
such as positive macroeconomic data and rally in the equities
markets," said Toby Hassall, a commodities analyst at
Commodities Warrants Australia.
"Those factors, along with the U.S. dollar, should again set
the tone for oil this week."
Oil and other commodities have tracked equities markets in
recent months as analysts seek signs of the economic outlook
after the downturn cut world energy demand for the first time in
a quarter century.
In addition to earnings from companies such as Exxon Mobil
Corp <XOM.N>, Honda Motor Co <7267.T> and Mitsubishi UFJ
Financial <8316.T>, analysts said investors will also look out
for U.S. gross domestic product data to see if a second-half
recovery is on track.
A faster rebound in Asian economies, led by China, would
offer further support for oil prices in coming months, some
analysts said.
"The central factor in determining the speed of adjustment
in oil products will be the pace of recovery in Asia," Barclays
Capital said in a research note.
"The sensitivity of oil demand to economic growth is greater
in Asia than in other regions, and the tendency for economic
growth to surprise consensus estimates on the upside also
appears to be greater in Asia."
Oil has more than doubled since falling to $32.40, the
lowest in more than four years, in December, due in part to
supply curbs by the Organization of the Petroleum Exporting
Countries.
Despite the rally, speculators have pared back bullish bets
in the crude market, cutting net long positions to a scant 2,218
lots in the week to July 21, regulatory data showed.
[]
(Reporting by Fayen Wong and Alex Lawler in London; Editing by
Peter Blackburn)
