* Steady as equities take a breather, US oil data in focus
* Eyes on U.S. June quarter GDP, to show another
contraction
* Slow global distillates demand still a drag
(Updates prices, adds distillates storage, Aramco comments)
SINGAPORE, July 28 (Reuters) - Oil held steady above $68 a
barrel on Tuesday after climbing to the highest in over three
weeks in the previous session, as Asian stock markets took a
breather from their rally.
Prices had jumped to $68.99 on Monday, the highest since
July 2, spurred by robust U.S. homes sales data that raised
optimism for an economic recovery.
The market is now looking to Friday's U.S. GDP data,
expected to show a fourth-straight quarter of contraction.
"Most economists are looking at a big subtraction in the
June quarter, and there will be a steep drawdown in
inventories. This could give support on the upside," said Ben
Westmore, a commodities analyst at National Australia Bank,
adding that the fall in inventories may signal that consumption
is improving.
U.S. crude <CLc1> edged up 10 cents to $68.48 a barrel by
0540 GMT, after surging towards $70 on Monday, as gasoline and
heating oil futures rose for the 10th consecutive session.
London Brent crude <LCOc1> rose 8 cents to $70.89 barrel.
Hopes that the global economy would emerge from the
recession and lift falling oil demand have helped push crude
prices up from below $33 a barrel in December, where it had
fallen from record peaks near $150 hit in July last year.
"Although there is a bit of moderation of the dollar, the
equities market is the most important factor for oil," said
Westmore, pointing to the U.S. dollar, which held near a more
than seven-week low against the euro.
Major Asian stock markets paused on Tuesday after surging
about 16 percent over two weeks, but sentiment remained
supported by hopes of strong corporate results in the region
and expectations of a recovery in the U.S. economy. []
Investors are also keeping an eye on U.S. weekly oil
inventories, in which a Reuters poll forecast a 300,000-barrel
drop in crude stocks and a 600,000-barrel fall in gasoline. But
distillates stocks are projected to have risen by a hefty 1
million barrels. []
The American Petroleum Institute data is scheduled for late
Tuesday while the report from the U.S. Energy Information
Administration (EIA) is due out on Wednesday.
The oil markets remain clouded by fears of poor global
demand for diesel and jet fuel, with volumes stored at sea
rising by 10 million barrels since mid-June to 72 million
barrels, enough to meet 85 percent of daily global demand.
[]
On the supply side, Saudi Aramco's oil output capacity
touched 12 million barrels per day last month when three new
oilfield projects started, one of which is the Shaybah oilfield
expansion, the al-Hayat newspaper reported the firms's chief
executive as saying.
CEO Khalid al-Falih was also confident that the global fall
in oil demand was temporary and consumption growth would
eventually resume, []
(Reporting by Ramthan Hussain; Editing by Michael Urquhart)
