* Weaker U.S. dollar boosts buying interest
* For a technical view, click: []
* U.S. non-manufacturing sector grew in June
(Updates prices, adds data)
By Emma Farge
LONDON, July 6 (Reuters) - Oil prices rose towards $74 a
barrel on Tuesday, changing direction after several days of
declines, as rallying equities and positive macroeconomic data
boosted expectations for the pace of global fuel demand growth.
U.S. crude for August delivery <CLc1> rose $1.62 to $73.76 a
barrel by 1438 GMT, after earlier falling more than $1 to its
lowest level in over a month.
ICE Brent crude for August <LCOc1> rose $1.69 to $73.16 by
the same time.
The market switched direction after global stocks bounced
off six- and seven-week lows, with MSCI's all-country world
stock index <.MIWD00000PUS> up over 1 percent.
The dollar also fell against other currencies in a move that
helped lift oil prices by making the commodity cheaper for
non-dollar buyers. []
Prices extended gains during the day after news the U.S.
non-manufacturing sector grew in June for a sixth straight
month, easing fears of a double-dip recession. []
The oil price move is part of an extended session that will
combine the trades of Monday and Tuesday on the New York
Mercantile Exchange (NYMEX) because of the U.S. Independence Day
holiday.
"I would say that the downwards movement has been overblown.
Macroeconomic data and equities are in the driving seat and
that's why sentiment is better today," said oil analyst Amrita
Sen at Barclays Capital.
Oil prices fell every day last week for a cumulative decline
of 8.4 percent, the biggest weekly drop since early May.
ENFEEBLED
Earlier on Tuesday, prices dived to the lowest level since
June 8 after reports on Monday showed global services growth
slowed in June and after weak manufacturing data for major
economies published last week. []
The data had stoked concerns of stagnation in the world
economic recovery and this enfeebled risk appetite for oil.
For some, Tuesday's bounce could signal a push towards the
middle of the $70-$80 a barrel range.
"Energy prices have arguably discounted the slower growth
picture by moving lower, so we think the complex should be able
to defend its mid-June lows for the time being," said Edward
Meir, senior commodity analyst at MF Global, referring to prices
in the mid-$70s last month.
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For a graphic on the performance across commodity markets
this year: http://link.reuters.com/hun72k
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Later on Tuesday, U.S. non-manufacturing PMI data for June
is set to give further indications about the direction of the
economy.
Weekly stocks data from the American Petroleum Institute
(API) will be delayed to Wednesday due to the U.S. holiday and
government statistics from the Energy Information Administration
(EIA) will be published on Thursday.
Traders will also watch closely a weather system located
between Mexico's Yucatan peninsula and western Cuba which has a
30 percent chance of developing over the next two days into a
tropical cyclone, the U.S. National Hurricane Center said late
on Monday. []
"With some 14-23 hurricanes expected in the Gulf over the
next few months, we would be very reluctant to go short this
market right now," said Meir.
The system's location and expected course are similar to
those Hurricane Alex followed in its formation late in June,
before moving into the Gulf of Mexico, where it forced Mexican
oil terminals to shut and U.S. producers to curb output.
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by William Hardy)
