* Oil hits highest since July 2
* European stocks rise after gains in Asia
(Updates prices, adds quotes)
By Alex Lawler
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 firmed slightly 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 50 cents to $68.55 by 0952 GMT. Prices hit
an intraday high of $68.99, the highest since July 2. Brent
crude <LCOc1> rose 61 cents to $70.93.
"As we are still in the earnings season and have to
face some key inputs on the U.S. economy this week, the oil
markets are still likely to be lead by equities," said Olivier
Jakob, oil analyst at Petromatrix.
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.
This week's earnings include Exxon Mobil <XOM>, Honda Motor
<7267.T>, Motorola <MOT>, Deutsche Bank <DBKGn.DE> and BP
<BP.L>. Data this week includes June U.S. new homes sales later
on Monday and U.S. second-quarter gross domestic product figures
on Friday.
"The U.S. GDP number could be the key exogenous input of the
week," Jakob said.
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 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."
World oil consumption will rise for the first time in two
years in 2010 as a recovery in the global economy boosts demand,
according to a Reuters poll of top oil-tracking analysts and
organisations [].
But the expected increase of 1.1 percent worldwide is
unlikely to drain away all the excess supplies, despite the slow
growth in production outside the Organization of the Petroleum
Exporting Countries.
Oil demand will rise by 900,000 barrels per day (bpd) to
84.9 million bpd in 2010, the poll of nine forecasters found.
World demand has fallen by 2.5 percent since hitting 86.2
million bpd in 2007, as the dual impact of high prices and the
economic crisis cut consumption.
(Additional reporting by Fayen Wong in Perth; Editing by
Peter Blackburn)
