Oil above $64, buoyed by Asian stocks

By Fayen Wong

PERTH (Reuters) - Oil rose above $64 a barrel on Monday, extending last session's 2.5 percent gains, bolstered by a rally in Asian stocks and fall in the dollar on hopes of a global economic recovery.

Oil gained 6.1 percent last week -- its first weekly gain in a month -- thanks to a series of positive economic data and a rally in the equities markets, which came on the back of better-than-expected U.S. corporate earnings.

The slide in risk appetite also knocked the dollar, with the euro rising to a three-week high.

U.S. crude oil for August delivery rose 54 cents to $64.10 a barrel by 4 a.m. British time, after settling up $1.54 at $63.56 on Friday. London Brent crude for September rose 55 cents to $65.93.

"Gains in the stock markets are lifting risk appetite, which is helping to push oil prices higher," Ben Westmore, a commodities analyst at the National Bank of Australia.

The MSCI index of Asia Pacific stocks outside Japan climbed for a fifth session to the highest since late September 2008 on Monday, with hopes for corporate earnings lifting sentiment across the board.

News that CIT Group Inc's CIT.N board approved a deal with bondholders for $3 billion in rescue financing to the lender late on Sunday also lifted risk appetite.

Oil's gains on Friday were boosted by a government report that showed construction of new homes and the issue of building permits in the United States rose more than expected in June, signalling a potential economic recovery.