UPDATE 10-Oil tops $74 on expected U.S. inventory drop

                                
 * A large drop in U.S. crude stocks likely
                                
 * Rising equities markets helping oil
                                
 * Coming Up: API stock report at 4:30 p.m. EDT, EIA Thurs
  (Updates to close, adds quote)
                                
 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 that stock data will
show a drop in U.S. crude inventories.
                                
 U.S. crude <CLc1> closed up $2.09, or 2.9 percent, to
$74.07 per barrel, posting its biggest percentage gain since
June 25. It closed at $71.98 Monday, the lowest since early
June. ICE Brent crude futures <LCOc1> were up $2.06 at $73.51.
                                
 Weekly U.S. oil data from industry group American Petroleum
Institute at 4:30 p.m. EDT (2030 GMT) Wednesday and the U.S.
Energy Information Administration due on Thursday are expected
to show a sizable draw on crude oil stocks.
                                
 "You have the expectation of an inventory draw. You've got
equities up and you haven't had any real negative economic news
today -- for a change - so markets are all up today," said Tom
Bentz, a broker at BNP Paribas Commodity Futures Inc, in New
York.
                                
 He added crude got some technical support as it started to
head closer to $70 per barrel, following several weeks of
trading within the same range.
                                
 Crude also drew support from a broad rally in equity
markets that sent the Dow Jones Industrial average up 2
percent. A higher profit outlook from State Street Corp bank
made equities markets more optimistic about global economic
growth, which could spur more demand for oil. [.N]
                                
 Traders were also eyeing a low pressure system near
Mexico's Yucatan Peninsula that has a 50 percent chance of
developing into a tropical depression, which could threaten oil
and gas production. [ID:nN07163911]
                                
 INVENTORIES TO FALL
                                
 U.S. oil data for the week to July 2 will likely show a
drop of 2.3 million barrels in crude stocks, a fall for the
second consecutive week, due to lower imports in the United
States, a Reuters poll of analysts showed. [ID:nN07161395]
                                
 Gasoline inventories were forecast down 200,000 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. [Graphic: http://link.reuters.com/myp36m]
                                
 "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.
                                
 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. [ID:nBRQ009910]
                                
 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.
[ID:nLDE6660XL]
                                
 (Reporting by Gene Ramos in New York and Alejandro
Barbajosa in Singapore; editing by Marguerita Choy, Sofina
Mirza-Reid and Lisa Shumaker)