UPDATE 6-Oil up more than 2 percent on recovery optimism

                                
 * Equities, euro strengthen, boost oil futures
                                
 * Euro zone industrial output April rise helps lift oil
                                
 * U.S. says storm could form in the Atlantic supports oil
                                
 * Coming up: July Brent contract expiry on Tuesday
 (Recasts, updates prices, market activity, changes dateline
from LONDON)
                                
 By Robert Gibbons
                                
 NEW YORK, June 14 (Reuters) - Oil prices rose more than 2
percent on Monday, jumping above $75 a barrel, as optimism
about global economic recovery boosted fuel demand expectations
and sent stock markets and the euro higher.
                                
 "Follow-through strength in most global equity markets from
last week and highest level in the euro in more than a week are
forcing renewed buying interest back into the energy complex,"
Jim Ritterbusch, president at Ritterbusch & Associates, said in
a research note.
                                
 At 12:14 p.m. EDT (1614 GMT), U.S. crude for July <CLc1>
was up $1.82, or 2.47 percent, at $75.60 a barrel, having
reached a $75.99 intraday high, which still had prices well
below a 19-month high above $87 in early May.
                                
 in London, ICE Brent <LCOc1> for July delivery rose $1.52
to $75.87 a barrel. The Brent July contract expires on
Tuesday.
                                
 Euro zone industrial production in April surged
year-on-year more than in any month in almost two decades, data
showed on Monday, reassuring investors the economic recovery
could be gathering pace. [ID:nLDE65D0YC]
                                
 The European Union's statistics office, Eurostat, said
industrial output in the 16 countries using the euro rose 0.8
percent month-on-month for a 9.5 percent year-on-year gain.
                                
 Europe's strong industrial data pushed the Dow Jones
Industrials and the Standard & Poor's 500 indexes up 1 percent
in morning trading on Wall Street. [.N]
                                
 The euro <EUR=> rose to a one-week high against the dollar,
which was down more than 1 percent against a basket of
currencies <.DXY>.
                                
 A weaker U.S. dollar tends to boost the price of
dollar-priced commodities as it lowers the price to holders of
other currencies and reduces the value of the currency oil
producers receive for their product.
                                
 "Some of the fears about the European debt crisis are
easing," said Tony Nunan, a risk manager with Mitsubishi Corp.
                                
"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 2010) will be better than the first
half," Nunan added.
                                
 European leaders will meet on Thursday to try to convince
financial markets that Europe's debt crisis can be contained
through improved economic policy coordination and budget
discipline. [ID:nLDE65C0FB]
                                
 Though oil prices slipped on Friday, they managed to post a
gain for the week, with U.S. crude prices up more than 3
percent on lift from strong Chinese export data and lower crude
stockpiles [EIA/S] reported by the government.
                                
 The U.S. National Hurricane Center said on Monday that a
low-pressure system in the central Atlantic Ocean had a 60
percent chance of developing into a tropical cyclone over the
next day or two, adding to support for oil. [ID:nN14196622]
                                
 OPTIMISM ABOUT DEMAND
                                
 Oil traders and analysts have been eyeing signs U.S. demand
is showing better signs of recovery as the summer driving
season heats up and distillate use improves.
                                
 After reaching a 19-month high above $87 a barrel in early
May, crude futures fell below $65 a barrel later in the month
as the European debt crisis unfolded.
                                
 Money managers raised their net long positions for crude
oil in the week to June 8, the U.S. Commodity Futures Trading
Commission said on Friday, marking the first time the net long
positions increased since the start of the euro zone crisis.
[ID:nN11606129] (Graphic
http://graphics.thomsonreuters.com/10/CFTC_Crude110610.gif)
                                
 For prices to extend their upward march, U.S. crude would
have to settle above $76, a level reached in intraday trade
last week for the first time in a month, Nunan said, based on
technical chart analysis.
                                
 Oil analysts also are anticipating U.S. crude oil output
will be tightened from offshore drilling delays in reaction to
BP's Gulf of Mexico oil spill. [ID:nN13165272]
                                
 "With the U.S. drilling ban likely to hit supplies from the
third quarter onward and demand expected to rise seasonally
between now and August, we feel that seasonality and
fundamentals are moving towards a price rebound," J.P. Morgan
analyst Lawrence Eagles said in a report.
 (Additional reporting by David Sheppard in London, Alejandro
Barbajosa in Singapore and Gene Ramos in New York; Editing by
Walter Bagley)