Oil falls toward $67 after longest rally in 2009

Oil fell towards $67 on Friday, after equalling this year's longest rally, due to a fall in U.S. stocks futures following disappointing corporate earnings.

U.S. crude eased 4 cents to $67.12 a barrel by 1314 GMT, having scaled $67.68 earlier, the highest intra-day since July 2.

Oil's rally to Thursday had already matched the seven-day gain seen in May with the Dow industrials rising above the key 9,000 mark for the first time since January.

London Brent crude was up by 8 cents at $69.34.

"The stock markets are as important as any oil fundamentals at the moment. I cannot see what is going to decouple equities and oil given the way they are working together now," said Tony Machacek, oil futures broker at Bache Financial.

U.S. stock index futures dropped on Friday as disappointing results came from Microsoft Corp and American Express Co.

At 1355 GMT, the Reuters/University of Michigan Surveys of Consumers releases its final July consumer sentiment index. Economists polled by Reuters expect a reading of 65.0 compared with 70.8 in the final June report.

GASOLINE

Yet, losses were limited by falling supplies of gasoline. U.S. refiners have been hit by a slew of unplanned outages, adding to deep run cuts enacted in reaction to weak profit margins and slumping U.S. demand for fuel under the weight of the recession.

Benchmark New York RBOB gasoline futures have risen more than 8 percent so far this week, surpassing an about 5 percent gain in crude oil prices, and its profit level, or crack, in relation to crude oil has also risen.

"The current support on crude oil is not only driven by exogenous markets, equities/the dollar index, but is as well supported by products cracks that are making strong gains on the back of refinery glitches and expected run cuts," Olivier Jakob with Petromatrix said.

European refiners have also kept their runs low to ease oversupply of middle distillates, such as heating oil, squeezing gasoline output.