* Tropical depression forming in mid-Atlantic -NHC
* European equities surge on banking results
* Coming Up: U.S. manufacturing PMI; 1400 GMT
(Updates prices, stock market news, adds dollar)
By Joe Brock
LONDON, Aug. 2 (Reuters) - Oil hit a 12-week high near $80 a
barrel on Monday as robust corporate earnings fuelled optimism
over the strength of the global economic recovery and the
outlook for energy demand.
European stock markets hit a 3-month high as risk appetite
across commodity and financial markets picked up following
strong results from leading banks HSBC <HSBA.L> BNP Paribas
<BNPP.PA>. []
U.S. September crude <CLc1> rose 93 cents to $79.88 a barrel
by 1030 GMT, just off the intra-day peak of $79.90, the highest
price since May 6.
ICE Brent <LCOc1> earlier rose $1.09 cents to $79.27, the
highest level since June 21.
The U.S. dollar fell against a basket of currencies <.DXY>
on Monday as investors moved to riskier assets, helping to
support oil prices. A weaker greenback makes commodities cheaper
for some holders of alternative currencies.
The growing optimism among speculative investors on the
outlook for longer-term oil prices was evident in data from the
Commodity Futures Trading Commission (CFTC) on Friday.
Money managers increased net long crude oil positions, bets
that prices would rise, to the highest level since May on the
New York Mercantile Exchange in the week to July 27, the CFTC
said.
"Long positions are starting to creep back into the market,"
said Ben Westmore, a commodities analyst at National Australia
Bank in Melbourne.
"It's a gradual process of regaining confidence that there
is not going to be a default soon," he added, in a reference to
the euro zone's debt crisis.
For a graphic on crude net long positions:
http://graphics.thomsonreuters.com/10/CFTC_Crude300710.gif
A tropical cyclone forming in the mid-Atlantic also lent
support to oil prices as the hurricane season enters what in
recent years has been a period of peak activity between August
and early October. Atlantic storms sometimes enter the Gulf of
Mexico, posing a threat to U.S. and Mexican oil infrastructure.
The U.S. National Hurricane Center (NHC) said late on Sunday
that a tropical depression may be forming in the mid-Atlantic,
assigning a 90 percent likelihood that the system may become a
tropical depression within the next day or so.
SLOW RECOVERY
Despite Monday's gains, some analysts warned the latest oil
price rally may be short-lived if investors focus on the weak
fundamental outlook following lacklustre economic data.
"I don't see a reason for anymore significant rise in oil
prices and today's gains could easily be wiped out," said
Christophe Barret, oil analyst at Credit Agricole.
"Fundamentals have not improved when you look at Chinese and
U.S. economic indicators they look pretty weak," Barret added.
China's official purchasing managers' index (PMI) fell to a
17-month low in July of 51.2 from 52.1 in June, the China
Federation of Logistics and Purchasing (CFLP) said on Sunday.
The PMI is designed to provide a timely snapshot of business
conditions and a figure above 50 indicates expansion.
[]
On Monday, an index based on a nationwide survey of business
executives conducted for HSBC showed Chinese manufacturing
shrank in July for the first time since the global downturn in
March 2009 on government steps to slow bank lending and fight
property speculation. []
Meanwhile, data on Friday showed that U.S. gross domestic
product expanded at a 2.4 percent annual rate, missing
expectations for growth of 2.5 percent, after an upwardly
revised 3.7 percent growth pace in the first quarter.
Attention this week will remain on U.S. economic data, with
the Institute for Supply Management manufacturing index expected
later on Monday, followed by July payrolls on Friday.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
