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* Economic data boosts stock markets and oil futures
* Tropical depression forms in Caribbean, lifts oil
* Dollar weakens vs euro, currency basket and boosts oil
* Coming up: CFTC positions data Friday, 3:30 p.m. EDT
(Recasts, updates prices, market activity, changes byline and
moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, July 22 (Reuters) - Oil jumped nearly 3 percent
and back above $78 a barrel on Thursday as equities rallied on
stronger-than-expected economic data and as a tropical
depression looked like it might disrupt Gulf of Mexico
production.
A weak dollar, which lowers the value of currency producers
receive, also helped push oil prices up after they finished the
previous session more than 1 percent lower.
U.S. crude oil for September delivery rose $2.22, or 2.9
percent, to $78.78 a barrel by 12:40 p.m. EDT (1640 GMT),
trading as high as $78.95, the highest front-month crude price
since crude prices reached $79.38 on June 28.
London ICE Brent futures <LCOc1> rose $1.96 to $77.33.
"You had the euro zone data and equities are very strong
despite the jobless claims rising. We've not seen the dollar
index getting pounded like this in a while," said Addison
Armstrong, analyst at Tradition Energy in Stamford,
Connecticut.
"If we get a storm it could be setting up the market to
make a run at $80."
Global stocks rose and the euro strengthened on upbeat
corporate results, better-than-expected U.S. housing data, and
an improvement in European manufacturing and services activity.
[]
Tropical Depression 3 formed near the Bahamas, the U.S.
National Hurricane Center said on Thursday. The system is
expected to strengthen into a tropical storm within 12 hours
but not to strengthen into a hurricane before moving inland.
[]
All of the weather models forecast the depression to skirt
south of Florida and move northwest across the oil producing
central Gulf of Mexico before hitting the coast of Louisiana or
Texas.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Link to the NHC: http://www.nhc.noaa.gov/
Link to weather models: http://www.skeetobiteweather.com/
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Thursday's rally pushed oil prices back above two key
technical resistance points for a second consecutive day: the
200-day moving, which was $77.62 on Thursday, and a trend line
connecting several intraday peaks going back to the April 6.
(Graphic: http://link.reuters.com/cyk98m )
Oil received an early lift when European purchasing
managers' indexes showed private sector business activity
accelerated in July, surprising economists who had expected a
slowdown. []
"I think that this is a very good sign that we are not
heading for a double-dip recession," Dekabank analyst Sebastian
Wanke told Reuters Insider.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Reuters Insider interview with Sebastian Wanke:
http://link.reuters.com/ruk78m
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
European shares <> [] rose on the survey data, and
in anticipation of the results of the European Union's
publication of euro-zone bank stress tests from 1500 GMT on
Friday. They are expected to show generally positive results
for Greece, Italy and Ireland and a few failures in Portugal
and Spain.
(Additional reporting by David Turner and David Sheppard in
London and Alejandro Barbajosa in Singapore; Editing by David
Gregorio)
