* U.S. debt-limit deal expected to pass, lifts oil * Low pressure system could form tropical cyclone-NHC * Coming up: API oil data, 4:30 p.m. EDT Tuesday NEW YORK, Aug 1 (Reuters) - U.S. crude futures rose on Monday as a tentative deal reached in Washington to end the debt-ceiling row and prevent an unprecedented default lifted equities and oil prices. After months of discord, Republican and Democratic lawmakers were expected to vote on Monday on a White House-backed deal to raise the U.S. borrowing limit and avert default. The Senate was expected to pass the deal, which raises the $14.3 trillion debt ceiling and cuts about $2.4 trillion from the deficit over the next decade. But the bill may face tougher opposition in the House of Representatives where both conservative supporters and liberal lawmakers have expressed dissatisfaction with the agreement. While oil futures surged, clouds remained on the oil demand horizon. Factories in Asia and Europe all but stagnated in July, according to business surveys that showed the weakest rates of growth since major industrial powers were struggling through the 2009 recession. China's official government purchasing managers index (PMI) fell to 50.7 from 50.9 in June, its weakest in more than two years, while the HSBC PMI fell below the 50 mark for the first time in a year -- to 49.3 in July from 51.6. The euro zone manufacturing PMI fell to 50.4 in July from 52.0 in June -- its worst showing since September 2009 and barely above the 50 mark dividing growth and contraction. FUNDAMENTALS * On the New York Mercantile Exchange, September crude rose $1.60, or 1.7 percent, to $97.30 a barrel by 8:48 a.m. EDT (1248 GMT), trading from $96.18 to $97.55. * British oil major BP said the Forties Pipeline System is shut this week to remove an unexploded mine from World War II. * A low-pressure system located about 300 miles (483 kms) east of Martinique has a 90 percent chance of developing into a tropical cyclone during the next 48 hours, the U.S. National Hurricane Center (NHC) said. * Speculators raised their net long positions on the two main oil contracts, Brent and gas oil , traded on the Intercontinental Exchange (ICE) in the week to July 26, according to data published by the exchange. * Iraq's oil exports dipped to 2.164 million barrels per day (bpd) in July from 2.275 million bpd in June as more crude was sent to local refineries to meet growing demand for fuel because of hot weather, Falah Alamri, head of SOMO, the State Oil Marketing Organization, said. * Taiwan's Formosa Petrochemical Corp will stop oil product exports after the government ordered the owner of Asia's fifth-largest refinery to shut the plant down for safety checks following the seventh fire in a year. * Syrian tanks shelled the city of Hama for the second day on Monday, killing at least four civilians, residents said, in an assault to try to crush protests against President Bashar al-Assad. MARKETS NEWS * The dollar rallied against the yen and the Swiss franc as investors unwound safe-haven plays on expectations U.S. lawmakers would pass a debt-limit bill. But the dollar index , measuring the greenback against a basket of currencies, was weaker and investors remained worried about potential credit ratings downgrades by ratings agencies. * U.S. stock index futures surged more than 1 percent on relief over a deal to raise the debt ceiling. * Gold retreated in the face of Washington's debt deal. * World stocks rose on the U.S. avoiding debt defaut. UPCOMING DATA/EVENTS * Weekly inventory data from the American Petroleum Institute, 4:30 p.m. EDT (2030 GMT) Tuesday. 8:48 LAST NET PCT LOW HIGH CURRENT DAY AGO CHNG CHNG VOL VOL CLc1 97.30 1.60 1.7% 96.18 97.55 44,057 236,246 CLc2 97.72 1.59 1.7% 96.65 97.97 6,306 48,996 LCOc1 118.89 2.15 1.8% 116.96 120.40 70,803 196,458 RBc1 3.1063 0.0484 1.6% 3.0644 3.1290 4,514 27,763 RBc2 2.9653 0.0442 1.5% 2.9293 2.9890 2,092 61,012 HOc1 3.1637 0.0637 2.1% 3.1025 3.1933 6,793 23,335 HOc2 3.1756 0.0626 2.0% 3.1360 3.2044 2,322 49,905 * NYMEX crude oil for September rose $1.60 to $97.30 a barrel by 8:48 a.m. in volume of 44,057 lots.

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