* Rising equities markets supporting oil
* API shows large drop in U.S. crude stocks
* Coming Up: EIA crude stock report at 11 a.m. EDT
(Recasts, adds API data, price reaction)
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 signs that U.S. crude inventories
fell sharply as a result of Hurricane Alex.
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.
Industry group American Petroleum released data showing an
inventory draw of 7.3 million barrels -- far greater than the
expected 2.3 million barrels.
That decline, attributed to lower output in the Gulf of
Mexico as companies took production offline ahead of Hurricane
Alex, pushed crude prices up to $74.92 after settlement.
The U.S. Energy Information Administration on Thursday is
slated to release data on crude inventories that is also
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 nearly 3
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. []
Traders also eyed 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. []
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, a Reuters poll of analysts
showed.[]
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.
[]
"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 on 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.
[]
(Reporting by Gene Ramos in New York and Alejandro
Barbajosa in Singapore; editing by Marguerita Choy, Sofina
Mirza-Reid and Lisa Shumaker)
