LONDON (Dow Jones)--Crude oil futures were higher in London Thursday moving in to positive territory as the dollar hit intraday lows. "Crude futures have bounced back up, gaining strongly over the past week," said Andrey Kryuchenkov analyst at VTB Bank, attributing some of that rise to a pronounced narrowing in the contango structure--where near-term futures prices are cheaper than prices further along the curve. "Oil prices benefited from rallying equities amid improving risk sentiment, some positive macroeconomic data and record June crude oil imports in China. In addition, crude was helped by a softer dollar." A weaker dollar compared with the euro and other currencies lifts oil prices as it makes the commodity, which is traded in dollars, less expensive to buy for holders of other currencies. At 1130 GMT, the August Brent contract on London's ICE futures exchange was up 8 cents at $76.85 a barrel. The August light New York Mercantile Exchange light sweet crude contract traded 42 cents higher at $77.46 a barrel. The ICE's gasoil contract for August delivery was flat at $651.75 a metric ton, while Nymex gasoline for August delivery was 132 points higher at 207.97 cents a gallon. Trading has been volatile in the last week, with crude rallying on fresh optimism about economic recovery and an extended rally in equity markets, but quickly losing ground on dovish minutes from the U.S. Federal Reserve and soft growth data from China. U.S. inventories data from the Department of Energy for the week to July 9 was a mixed bag with a crude draw of 5.06 million barrels sparking a brief rally. Refinery runs soared to more than 90% of total capacity, their highest level in two and a half years. Meanwhile product stocks including gasoline and distillates inventories rose. Looking forward Goldman Sachs analysts have adjusted their forecast for prices for the remainder of the year and now expect Nymex crude to trade at the lower end of a $85-$95 a barrel range in the second half of 2010, "as it will take longer to draw-down OECD [Organization of Economic Co-operation and Development] total petroleum inventories to [a] more normal level." The analysts said high crude and products stocks on both sides of the Atlantic combined with fragile sentiment mean oil market fundamentals have not tightened as quickly as anticipated. They expect global refining margins will remain under pressure as a result of expanding capacity in Asia. The widening light and heavy crude spread is likely to encourage complex refiners to conclude maintenance work and increase their production, they said. Looking more broadly at supply and demand fundamentals for the market the Organization of Petroleum Exporting Countries said in its monthly report it expects moderate global oil demand growth next year, an indication the group will probably have to keep its big existing supply cuts in place well into a third successive year.

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