* Euro extends gains vs dollar, helps lift crude futures
* European debt auctions bolster investor confidence
* Coming up: API inventory data, 4:30 p.m. EDT (2030 GMT)
(Recasts, updates prices; moves dateline from LONDON)
By Robert Gibbons
NEW YORK, June 15 (Reuters) - U.S. crude oil futures
climbed on Tuesday after the euro and equities markets rose
when debt auctions in Europe bolstered investor confidence in
global economic recovery.
"The euro is at its intraday highs and (oil) prices are
nearing the 200-day moving average at $76.77, a make-or-break
point for bulls and bears," said Stephen Schork, president at
the Schork Group in Villanova, Pennsylvania. (Graphic
http://graphics.thomsonreuters.com/gfx/MR_20101506115758.jpg)
At 11:43 a.m. EDT (1543 GMT), U.S. crude futures <CLc1>
were up $1.33, or 1.77 percent, at $76.45 a barrel, having
traded as high as $76.70.
In London, front-month ICE Brent July <LCOc1> crude
futures, which expire at close of trade, rose $1 to $76.20, at
a deficit to it's U.S. crude crude counterpart, but with the
spread seesawing much of the session.
Global stocks gained and the euro rose as debt auctions in
Spain and other countries in Europe bolstered investors'
confidence about the state of the euro zone's finances.
[] []
Spain admitted the European financial crisis was affecting
the country's banks and foreign banks were refusing to lend to
some of them. [] []
Ratings agency Moody's downgrade of Greece's bonds limited
crude oil's strong rise on Monday.
The oil market has rallied even though analysts said it was
struggling to shake off lingering nervousness across global
financial markets about investing in riskier assets.
"Basically, it's a tug of war between the credit
consideration, particularly the Greek downgrade and prospects
of European growth, and the API (American Petroleum Institute)
data," said Paul Harris, analyst at Bank of Ireland. "Traders
are happy to play the range."
U.S. crude futures recently have been trading between the
May 20 low of $64.24, the weakest front-month price since July
30, 2009, and the 2010 peak of $87.15 struck on May 3.
Analysts expect oil to remain closely correlated to
international financial markets.
"Today there is only one global market. There is a very
high correlation between oil and equities," said Olivier Jakob
of Petromatrix. "To break away from that correlation is going
to take something very significant."
As the euro strengthened on Tuesday, the dollar index
<.DXY>, measuring the U.S. currency against a basket of
currencies, slipped. (Graphic
http://graphics.thomsonreuters.com/gfx/JBO_20101506105359.jpg)
The depth of Europe's problems has raised the possibility
that even Asia's fuel demand, long expected to be the driver of
future consumption, could wane.
China's Banking Regulatory Commission said on Tuesday the
global economic recovery was likely to be "slow and tortuous"
and China faced risks from a multitude of factors, including
trade protectionism and bad real estate loans. []
Overall, demand from China, the world's second-largest
energy consumer, was expected to stay robust.
NEXT FOCUS: INVENTORIES
The market will take further direction from weekly
inventory reports, starting with industry data from the
American Petroleum Institute on Tuesday at 4:30 p.m. EDT (2030
GMT), followed by government data on Wednesday.
A preliminary Reuters poll of analysts on Monday []
estimated crude oil inventories would have fallen by 1.4
million barrels in the week to June 11.
Stores of refined products were expected to have increased
slightly.
Other recent factors cited as supportive to oil prices have
been forecasts the U.S. hurricane season, which runs until
November, will be particularly active [] and delays
in U.S. Gulf of Mexico drilling in response to BP Plc's <BP.L>
oil spill.
The National Hurricane Center said Tuesday it cut to 30
percent the chance that a low-pressure system in the central
Atlantic Ocean would develop into a cyclone. []
(Additional reporting by Alejandro Barbajosa in Singapore and
Barbara Lewis in London; Editing by Walter Bagley)
