* CIT rescue package helps lift global markets
* Leading economic index shows recession may be near end
* Algeria says OPEC may need to cut output in Sept
(Updates with settlement prices, commodities gains)
By Matthew Robinson
NEW YORK, July 20 (Reuters) - Oil rose on Monday as
optimism about a potential global economic recovery lifted
markets and expectations of a turnaround in fuel demand.
World markets extended gains from last week on strong
corporate earnings and news of a rescue package for troubled
U.S. lender CIT <CIT.N> [].
U.S. crude <CLc1> settled up 42 cents at $63.98 a barrel,
after rising more than 6 percent last week. Brent crude <LCOc1>
rose $1.06 to settle at $66.44 a barrel.
Further support came after an index gauging the U.S.
economy's prospects increased for a third straight month in
June, suggesting the recession was drawing to a close.
[]
The index of leading economic indicators, which is supposed
to forecast economic trends six to nine months out, rose 0.7
percent in June following a revised 1.3 percent gain in May,
the New York-based Conference Board said.
"I think it's mostly continued follow-through after last
week's rally. Economic optimism fueling stronger equities and
the weaker dollar are supporting commodity markets," said Tom
Bentz, analyst at BNP Paribas Commodity Futures Inc.
A survey of economists showed the recession's grip on top
oil consumer the United States appeared to be easing but had
not yet ended. []
The dollar hit a six-week low, also supporting commodities
denominated in the greenback, as investors waded back into
riskier assets and higher-yielding currencies. [] Gold hit
a six-week high and copper touched nine-month peaks while the
Reuters-Jefferies CRB index <.CRB> rose more than 1 percent.
Algeria's oil minister said OPEC will need to cut output
again when it meets again in September if there is not enough
demand for its crude. []
"I think OPEC's objective is to satisfy demand in the world
market and to meet any real demand," Chakib Khelil told
reporters in Milan.
"It will cut only if demand is destroyed or it disappears
in the market. If we see demand does not exist in the market in
September, we will have to cut."
The producer group agreed to a series of cuts last year to
lop 4.2 million barrels per day (bpd) of output from global
markets as part of a bid to lift flagging oil prices.
The global recessing has battered fuel demand, knocking
crude from record highs near $150 a barrel in July 2008 to
below $33 a barrel in December. Hopes an end to the recession
will spark consumption have pushed crude higher this year.
Data from the U.S. Department of Transportation showed
Americans drove 0.1 percent more miles in May compared with
year-ago levels, the second straight monthly increase
[].
A Reuters poll of analysts released ahead of weekly U.S.
inventory data forecast crude stockpiles fell by 1.8 million
barrels in the week to July 17, which would mark the seventh
straight week of declines. Distillate and gasoline stocks were
forecast up. []
The U.S. Department of Energy will release its data on
Wednesday, with data from the American Petroleum Institute due
out late Tuesday.
(Additional reporting by Robert Gibbons in New York, Alex
Lawler in London, Fayen Wong in Perth and Svetlana Kovalyova in
Milan)
(Editing by Christian Wiessner)
