Oil climbs back towards $70

LONDON, Aug 23 (Reuters) U.S. oil climbed back towards on Thursday, in tandem with stocks and other commodities, after closing at its lowest in almost two months the previous session.

U.S. crude was up 44 cents at .70 a barrel by 1034 GMT.

Prices have fallen about 12 percent from their record high .77 on Aug. 1.

London Brent crude gained 63 cents to .33.

Oil was knocked lower on Wednesday by weekly U.S. data showing a surprise increase in crude oil stocks. Thursday's move higher was part of a broad recovery in world financial markets.

''The dollar index has stopped rising and equities stopped falling, easing the global pressure. In other commodities, the agriculture sector is remaining quite firm,'' said Olivier Jakob, analyst at Swiss-based Petromatrix.

Asian stock markets jumped 2 to 3 percent, aided by a rise in Wall Street overnight and Bank of America's LONDON, Aug 23 (Reuters) U.S. oil climbed back towards $70 on Thursday, in tandem with stocks and other commodities, after closing at its lowest in almost two months the previous session.

U.S. crude was up 44 cents at $69.70 a barrel by 1034 GMT.

Prices have fallen about 12 percent from their record high $78.77 on Aug. 1.

London Brent crude gained 63 cents to $69.33.

Oil was knocked lower on Wednesday by weekly U.S. data showing a surprise increase in crude oil stocks. Thursday's move higher was part of a broad recovery in world financial markets.

''The dollar index has stopped rising and equities stopped falling, easing the global pressure. In other commodities, the agriculture sector is remaining quite firm,'' said Olivier Jakob, analyst at Swiss-based Petromatrix.

Asian stock markets jumped 2 to 3 percent, aided by a rise in Wall Street overnight and Bank of America's $2 billion injection into a major U.S. mortgage lender, seen as a vote of confidence in the beleaguered sector.

In Europe, the FTSEurofirst 300 index of European shares and London's FTSE 100 index were up more than one percent.

Providing further support to oil was the possibility of delays to Mexican crude supplies to U.S. refiners after Hurricane Dean.

State oil firm Pemex shut 80 percent of the country's output in advance of the hurricane. Shell Oil Co. cut crude runs at its Deer Park venture.

Pemex said it would begin to restore output on Friday and that operations would be at 80 percent by early next week if there was no major damage from Dean..

Reflecting on Wednesday's U.S. fuel inventory data, BNP Paribas forecast crude oil stocks would resume their decline in the coming weeks.

''The following sets of data should show the impact of lower imports as a result of Hurricane Dean, notably through the interruption of production in Mexican offshore crude production.'' ''As a result, we should see a downward trend in crude inventories resume, notably as the current backwardation continues to favour draws in storage,'' they wrote, referring to the premium U.S. crude oil for October delivery commands over later dates.

Barclays Capital technical analysts, who study charts to determine future price direction, put support for U.S. oil near $68 and near-term resistance at $70.15.

''A break below...however, would resume the downtrend toward $66.70 or even $64.60,'' the bank said in a research note.

REUTERS KR DS1650 billion injection into a major U.S. mortgage lender, seen as a vote of confidence in the beleaguered sector.

In Europe, the FTSEurofirst 300 index of European shares and London's FTSE 100 index were up more than one percent.

Providing further support to oil was the possibility of delays to Mexican crude supplies to U.S. refiners after Hurricane Dean.

State oil firm Pemex shut 80 percent of the country's output in advance of the hurricane. Shell Oil Co. cut crude runs at its Deer Park venture.

Pemex said it would begin to restore output on Friday and that operations would be at 80 percent by early next week if there was no major damage from Dean..

Reflecting on Wednesday's U.S. fuel inventory data, BNP Paribas forecast crude oil stocks would resume their decline in the coming weeks.

''The following sets of data should show the impact of lower imports as a result of Hurricane Dean, notably through the interruption of production in Mexican offshore crude production.'' ''As a result, we should see a downward trend in crude inventories resume, notably as the current backwardation continues to favour draws in storage,'' they wrote, referring to the premium U.S. crude oil for October delivery commands over later dates.

Barclays Capital technical analysts, who study charts to determine future price direction, put support for U.S. oil near and near-term resistance at .15.

''A break below...however, would resume the downtrend toward .70 or even .60,'' the bank said in a research note.

REUTERS KR DS1650