UPDATE 8-Oil steadies over $68; US home sales data support

                                
 * U.S. home sales up 11 percent in June
                                
 * China may consider fuel price cut - analysts
                                
 * U.S. crude, gasoline stocks seen down - poll
 (Updates prices, adds U.S. inventory poll)
                                
 NEW YORK, July 27 (Reuters) - Oil prices steadied above $68 a barrel on
Monday as strong U.S. homes sales data brightened optimism about the economy
and offset losses in the stock market.
                                
 Sales of new single-family homes in the United States rose by 11 percent in
June, above analyst expectations, while the inventory of homes for sale fell to
an 11-year low, government data showed on Monday. [ID:nN27520623]
                                
 "I think what you did see is that, when you have good news coming out, the
market wants to respond immediately," said Gene McGillian, analyst for
Tradition Energy in Stamford, Connecticut.
                                
 U.S. stocks dipped on Monday as profit-taking and worrying outlooks from
companies such as Aetna Inc <AET.N> overshadowed the housing data. [.N]
                                
 U.S. crude <CLc1> traded up 2 cents to $68.07 a barrel by 1:35 p.m. EDT
(1735 GMT) after earlier hitting $68.99, the highest since July 2. In London,
Brent crude <LCOc1> gained 18 cents to $70.50 a barrel.
                                
 Expectations that a rebound in the global economy could lift flagging oil
demand has helped push crude prices up from below $33 a barrel in December. The
recession has crimped crude demand, knocking oil off record highs near $150 a
barrel hit in July 2008.
                                
 A Reuters poll of analysts forecast world oil consumption would rise next
year for the first time in two years on expectations of a rebound in the global
economy. [ID:nLR342038]
                                
 [Click here for full poll spreadsheet
http://graphics.thomsonreuters.com/ce-insight/OIL-POLL.xls ]
                                
 China, the world's No. 2 oil consumer, may consider a modest cut of about 2
percent in retail fuel prices after benchmark crude prices fell more than 5
percent since Beijing's last price hike, analysts and industry sources said on
Monday. [ID:nPEK91826]
                                
 Demand from China and other emerging economies ignited the recent six-year
record rally in oil and commodity prices.
                                
 A Reuters poll of analysts ahead of weekly inventory data forecast a
300,000 barrel drop in U.S. crude oil inventories in the week to July 24, while
gasoline stocks were seen falling by 600,000 barrels. [EIA/S]
                                
 Distillates inventories were seen rising by 1 million barrels during the
week, according to the poll, which was taken ahead of data from the American
Petroleum Institute due out late Tuesday and a report from the U.S. Energy
Information Administration due out on Wednesday.
 (Reporting by Matthew Robinson, Gene Ramos and Robert Gibbons in New York,
Alex Lawler in London and Fayen Wong in Perth; Editing by John Picinich)