* A large drop in U.S. crude stocks likely
* Coming Up: API stock report at 2030 GMT, EIA Thursday
(Recasts, updates prices, changes byline, dateline)
By Brian Ellsworth
NEW YORK, July 7 (Reuters) - Oil prices rose on Wednesday
after six straight sessions of losses, lifted by hopes of a
strong earnings season and expectations data will show a drop
in U.S. crude inventories.
U.S. crude <CLc1> was up $1.70, or 2.36 percent, to $73.68
a barrel by 10:50 a.m. EST (1450 GMT), having fallen to $71.44
earlier. It closed at $71.98 Monday, the lowest since early
June. ICE Brent crude futures <LCOc1> were up $1.68 at $73.13.
Weekly U.S. oil data from industry group American Petroleum
Institute at 2030 GMT Wednesday and the U.S. Energy Information
Administration due on Thursday are expected to show a sizable draw on crude oil stocks.
"I think we're pricing in a draw, that's a definitely a
supportive factor," said Phil Flynn, analyst at PFGBest
Research in Chicago.
"And the stock market is up today. When you get a bit of
economic optimism, people think we're going to need more oil."
The Dow Jones Industrial average was up 1.17 percent in
morning trading as a higher profit outlook from State Street
Corp bank helped equities markets shrug off fears of slower
global economic growth. []
Adding to bullish sentiment was an announcement by the
Chinese government that it plans to invest more than $100
billion in infrastructure this year, helping spur an economy
that has been widely expected to slow this year.
China Daily, the country's official English-language
newspaper, said the government would $100 billion in 23 new
infrastructure "to boost domestic demand."
INVENTORIES TO FALL
U.S. oil data for the week to July 2 will likely show a 2.6
million barrel drop in crude stocks, a fall for the second
consecutive week, due to lower imports in the United States, a
Reuters poll of analysts showed. []
Gasoline inventories were forecast down 300,000 barrels.
The release has been delayed by one day due to the U.S.
Independence Day holiday Monday.
Oil markets have been trading consistently in line with
equities markets in recent weeks. Oil prices rallied in early
trading on Tuesday but slumped into negative territory after
stocks pared losses. []
"More than anything else, it's the strength of the equity
markets that are supporting crude oil markets," said Robert
Yawger, senior vice president, energy futures at MF Global in
New York.
After Hurricane Alex swept into Mexico last week, oil
traders are also eyeing a low pressure system that the U.S.
National Hurricane Center said had a 40 percent chance of
developing into a tropical depression. []
Euro zone economic growth in the first three months of 2010
was confirmed Wednesday at 0.2 percent quarter-on-quarter and
0.6 percent on the year, European Union statistics office
Eurostat said, but any stronger expansion in the second quarter
could be short-lived. []
The rate of growth in the U.S. non-manufacturing sector
slowed more than expected and hit its lowest since February,
the Institute for Supply Management said on Tuesday.
For a technical view, click:[]
(Reporting by Gene Ramos in New York and Alejandro
Barbajosa in Singapore; editing by Marguerita Choy)
