* Japanese manufacturer sentiment improves in Q2
* For a technical view, click: []
* Coming Up: Euro zone industrial output; 0800 GMT
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, June 14 (Reuters) - Oil climbed as much as 1.5
percent toward $75 on Monday as renewed optimism about the
global economic recovery rekindled appetite for risk, sending
Asian stock markets to a one-month high and the dollar down.
European leaders will meet on Thursday to set out proposals
to convince financial markets they can contain a debt crisis by
agreeing to tighten economic policy coordination and strengthen
budget discipline. []
"Some of the fears about the European debt crisis are
easing," said Tony Nunan, a risk manager with Tokyo-based
Mitsubishi Corp.
The dollar weakened about 0.8 percent against a basket of
currencies <.DXY>, with the euro at a one-week high, while
Japanese stocks rose led by the technology sector as the
nation's manufacturers grew more optimistic about the business
environment in the April-June quarter. []
"If the dollar is falling, it means that people are more
relaxed to take on risk. People have believed for a long time
that the second half (of the year) will be better than the
first half," Nunan said.
U.S. crude for July <CLc1> rose as much as $1.14 to $74.92
a barrel and was up $1 at $74.78 a barrel at 0648 GMT, still
down 14 percent from a 19-month high above $87 in early May.
ICE Brent <LCOc1> gained 89 cents to $75.24.
U.S. crude prices last week posted just their second weekly
gain in six weeks, up 3.2 percent, after strong Chinese export
data signaled fast-paced demand by the world's second largest
oil consumer is weathering sluggish economic growth in the key
European market.
OPTIMISM CARRIES ON
World stocks and the dollar rose on Friday after a
surprisingly strong reading of U.S. consumer sentiment buoyed
recovery prospects, even as an unexpected drop in the country's
retail sales damped risk appetite. []
U.S. crude would have to settle above $76, a level reached
in intraday trade last week for the first time in four weeks,
for prices to extend their upward march, Nunan said, based on
chart analysis.
Oil consumption in the U.S. is recovering, helped by the
seasonal summer peak in gasoline use. The nation's crude
inventories fell more than expected in the last week of June,
reducing a surplus that has prevailed for almost two years.
Crude fell to below $65 a barrel in mid-May as the European
debt crisis unfolded.
"We had a price correction and hopefully inventory has
peaked; as we go into the summer, U.S. demand is going to
increase," Nunan said. "We have recovered some of the pretty
good momentum that we had at the beginning of last week."
For a graphic on the crude oil net-long position of managed
money:
http://graphics.thomsonreuters.com/10/CFTC_Crude110610.gif
BP's Gulf of Mexico oil spill will affect U.S. petroleum
supplies as soon as the third quarter, according to JP Morgan.
The administration of U.S. President Barack Obama has
delayed plans to permit new offshore drilling as a result of
the environmental disaster. []
"With the U.S. drilling ban likely to hit supplies from the
third quarter onwards, and demand expected to rise seasonally
between now and August, we feel that seasonality and
fundamentals are moving towards a price rebound," JP Morgan
analysts headed by Lawrence Eagles said in a report dated June
11.
"Overall, while risks remain, we believe that the oil
market will start to tighten up over the coming months."
(Editing by Ed Lane, Himani Sarkar)
