* U.S. crude eyes 10th straight session of gains
* U.S. API and EIA oil inventory data in focus
* BP's oil and gas production rises 4 pct, Q2 profit halves
(Updates throughout, previous SINGAPORE)
By Joe Brock
LONDON, July 28 (Reuters) - Oil rose towards $69 a barrel on
Tuesday in its most sustained rally since hitting record highs
in July last year, supported by renewed optimism over global
economic recovery.
U.S. oil futures looked set to rise for a tenth straight
session on Tuesday, consecutive daily gains not seen since
prices hit a high of $147.27 last year.
U.S. crude <CLc1> rose 15 cents to $68.51 a barrel by 0850
GMT, after surging to $68.99 on Monday, the highest since July
2, spurred by robust U.S. homes sales data.
London Brent crude <LCOc1> rose 27 cents to $71.08 barrel,
off an earlier four-week high at $71.35.
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.
"I think it is still external factors lifting prices today,
rising stocks markets and economic optimism after the U.S. home
sales data yesterday," said Carsten Fritsch at Commerzbank.
European stock markets were slightly higher on Tuesday, set
for an eleventh day of gains in 12 sessions, while Asian stock
markets paused on Tuesday after surging about 16 percent over
two weeks.
Oil giant BP <BP.L> reported a mixed set of second quarter
results on Tuesday. BP is the first of the top tier of Western
oil companies, known as the five Supermajors, to report their
second quarter results.
Although it reported a halving in second quarter profits,
oil and gas production was up 4 percent and BP's cost saving
target was raised to $3 billion, from $2 billion. []
INVENTORIES
Investors were awaiting 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. Distillates stocks are
projected to have risen by a hefty 1 million barrels. []
"The inventory data could definitely be market moving
overnight especially when refiners have shut down some capacity
due to maintenance work," Fritsch said.
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.
Oil markets remained pressured by 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. []
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 quoted 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. []
Investors were awaiting with caution Friday's U.S. GDP data,
expected to show a fourth-straight quarter of contraction.
U.S. crude oil is expected to average nearly $73 a barrel in
2010, a Reuters poll showed on Tuesday, as oil demand improves,
albeit at a sluggish pace. []
(Editing by James Jukwey)
