Oil eases but hangs around $65 as equities help

Oil eased slightly but held above $65 a barrel on Thursday, buoyed by European equity markets rising for a ninth straight session and renewed speculation that an economic upturn would boost oil demand.

U.S. crude oil for September delivery fell 26 cents to $65.14 a barrel by 1252 GMT, after earlier hitting a low of $64.83. London Brent crude rose 11 cents to $67.32.

European shares rose again on Thursday, with the FTSEurofirst 300 <.FTSE3 index rolling through its longest winning streak since late 2006.

Data on Tuesday from the Energy Information Administration showed a 1.8 million-barrel fall in U.S. crude stocks last week, less than the expected 2.1 million-barrel draw.

"The EIA data looked pretty neutral, and there are some good structures in the markets to keep pushing it higher, but today the market seems to be trading more on euphoria from the stock markets," said trader Robert Montefusco at Sucden Financial.

"Dollar weakness is also helping the crude contracts to be a bit more constructive."

The dollar slipped on Thursday, edging close to a seven-week low versus the euro and a basket of currencies as early stock market gains suggested risk appetite was holding up.

Analysts at Barclays Capital wrote in a commodities research note that oil between $65-$75 a barrel "would be the most comfortable range for prices within this quarter."

THURSDAY DATA

Sales data for previously-owned homes in the United States in June, out at 1500 GMT, should provide more clues to any potential economic recovery for the world's largest consumer nation, with its knock-on effects then filtering through markets.

"There is some housing data out later that should have some impact on equities markets, which should in turn have some impact on crude," said Christopher Bellew, a broker at Bache Commodities in London.

The U.S. Labor Department released data showing first-time jobless benefit claims rose by around 30,000 to 554,000 for the week ended July 18.

Economists in a Reuters survey forecast a total of 550,000 new filings, compared with 522,000 in the prior week.