* Both sides must get out 'comfort zones,' Obama says

  * Bipartisan talks planned for Sunday at White House

  By Steve Holland

  WASHINGTON, July 9 (Reuters) - President Barack Obama said on Saturday political sacrifices will be needed by both Democrats and Republicans to break a budget impasse and avoid a looming U.S. debt default.

  Under pressure to reduce America's 9.2 percent jobless rate, Obama used his weekly radio and Web address to vow to seek common ground with his Republican opponents and try to overcome serious disagreements on taxes and spending cuts that he says will improve the atmosphere for job creation.

  He is to meet with top U.S. lawmakers from both parties on Sunday evening in what he says will be a session to perhaps begin the hard bargaining that will be necessary for a deal. Negotiators are working through the weekend.

  " Both sides are going to have to step outside their comfort zones and make some political sacrifices," Obama said. " And we agree that we simply cannot afford to default on our national obligations for the first time in our history."

  Obama and House of Representatives Speaker John Boehner, the top Republican in Congress, are trying to craft a sweeping budget deal that would ensure the national debt remains at a sustainable level by cutting $4 trillion from budget deficits over 10 years.

  That would give lawmakers political cover to raise the government's debt ceiling of $14.3 trillion before Aug. 2, when the country is due to run out of borrowing capacity. Failure to act soon, some warn, could push the United States back into recession and send shock waves through the global economy.

  Democrats and Republicans remain at odds over what elements should be part of the deal. Democrats are pushing for roughly $1 trillion in new tax revenue, while Republicans want to restructure popular benefit programs.

  The uptick in the jobless rate in June to 9.2 percent complicated the debate over the debt deal and was a harsh reminder of the fragility of the U.S. economy.

  Republicans who would like to deny Obama a second term when he runs for reelection in November 2012 are keeping up the pressure on the president over jobs.

  " If we've learned anything, it's that we cannot spend, tax, or borrow our way to prosperity," Representative Cathy McMorris Rodgers of Washington state said in the Republican weekly address. " To create jobs and set our country on a sound fiscal course, we must stop spending money we don't have."

  Obama, Boehner and other congressional leaders are due to meet at the White House on Sunday at 6 p.m. EDT (2200 GMT), with staffers working through the weekend to lay out options.

  There could be some hard bargaining in the session but it is not likely to produce a final deal, White House spokesman Jay Carney said.

  Boehner also tamped down expectations that Democrats and Republicans could reach agreement over the weekend. He said on Friday that the two sides must overcome serious disagreements on taxes and spending cuts.

  " It's not like there's some imminent deal about to happen," Boehner told a news conference. " This is a Rubik's Cube that we haven't quite worked out yet." (Editing by Bill Trott)

By Tim Reid

  WASHINGTON, July 9 (Reuters) - Budget talks between President Barack Obama and top Republicans enter a critical phase this weekend as they try to end a standoff over raising the government's borrowing limit.

  The talks are aimed at striking a a deal to slash the long-term deficit, which Republicans say is needed to secure their support for increasing the $14.3 trillion debt limit.

  The Treasury Department has warned that if Congress does not raise the debt limit by Aug. 2, the United States will run out of money to fully pay its bills, triggering " catastrophic" economic consequences and possibly another recession.

  The federal budget deficit -- essentially the government's annual overdraft -- is expected to hit $1.4 trillion this year and stay in the trillion-dollar range for years. The federal debt is the government's total accumulated borrowing. The U.S. government borrows about $125 billion each month.

  HOW CLOSE ARE THEY TO A DEAL?

  The White House, Republicans and Democrats have been negotiating since May to try to strike a deal on budget savings to clear the way for a debt limit rise but have repeatedly hit an impasse over the issue of taxes.

  Republicans have said any deal to cut long-term deficits should involve " trillions" of dollars but have insisted that those savings come from spending cuts alone. Democrats demand that any deal must involve a combination of both spending cuts and increased revenue, either through tax hikes or closing tax loopholes, or both.

  Negotiations led by Vice President Joe Biden collapsed in June when Republicans walked out over Democrats' demands that increased revenues be part of a deal, although significant progress was made in those sessions, with more than $1 trillion in savings identified.

  Obama and House Speaker John Boehner, the top Republican in Congress, stepped in to lead continued negotiations. On Thursday, the president met leaders from both parties to try to decide on the size of a budget-cutting package. Both sides are aiming for more than $2 trillion in savings, and as much as $4 trillion, over a period of 10 to 12 years.

  The hard part begins in a second meeting on Sunday, when they tackle the difficult question of how those savings will be achieved -- and the thorny issue of taxes will once again take center stage.

  After the talks on Thursday, Obama said the sides were still far apart on key issues. His spokesman, Jay Carney, said he was not prepared to predict a deal on Sunday.

  Boehner believes the prospects for a deal in the next few days are " 50-50" , according to a Republican Party aide.

  Further complicating talks was a dismal jobs report on Friday that will likely harden each side's positions. Democrats will use it to argue that too many spending cuts will endanger a fragile recovery. Republicans will say tax hikes will further destroy job growth.

  WHAT ABOUT A SHORT-TERM DEAL?

  Some members of both parties have suggested that with the Aug. 2 deadline so near, and the issue of taxes so troublesome, Congress should authorize a short-term debt limit rise -- perhaps to allow government borrowing until the beginning of next year -- to buy more time for a bigger deal.

  They say the two sides could agree on a budget cutting deal of about $1 trillion in spending cuts -- those identified in the Biden talks -- with a commensurate rise in the debt limit. That would allow the U.S. to pay its bills for about another eight months.

  But Obama insists he will not sign onto a short-term deal. Only a debt limit rise of more than $2 trillion will meet the country's borrowing needs through the November 2012 presidential election.

  Anything less will mean having to confront such a controversial debt limit vote in the midst of congressional and presidential election season -- and at a time when voters are concerned about spending and debt.

  WILL THE TEA PARTY BACK A DEAL?

  Even if Obama and Republicans reach a deal, it will likely face opposition from dozens of lawmakers aligned with the conservative Tea Party movement -- especially if it includes revenue increases.

  To push a deal through the House, Boehner is going to need Democratic help. But Obama is already facing a backlash from House liberals over his willingness to discuss cuts to the Social Security retirement program and Medicare, the government-run health insurance program for the elderly.

  With opposition from both Left and Right, even if party leaders strike a deal it will still need much work to garner the necessary votes in Congress to get it passed.

  WHO HAS THE MOST AT STAKE IN THE TALKS?

  There are considerable risks on all sides. If Boehner fails to get a " yes" vote in the House to raise the debt limit, Republicans will likely be blamed -- in the short-term at least -- for the economic turmoil that will follow.

  Many economists predict that a default by the United States will trigger panic in the bond markets, a spike in interest rates across the economy, with investors dumping the dollar en masse, and another recession.

  Yet Obama is widely seen as the steward of the economy and another recession will likely doom his chances of re-election.

  ARE THE MARKETS WORRIED?

  For now bond markets are calm, but that could change very quickly if talks collapse. Three credit ratings agencies have said that the U.S. could lose its coveted AAA credit rating if no deal emerges and the debt limit is not raised. (Editing by Christopher Wilson)

* China June inflation quickens to 6.4 pct yr/yr

  * June non-food inflation picks up to 3 pct highest on record (Adds details, analyst comments)

  By Xin Zhou and Koh Gui Qing

  BEIJING, July 9 (Reuters) - China's annual inflation accelerated to a three-year high in June, increasing the chances that the central bank will keep raising interest rates to tame price pressures that are spreading beyond food and energy.

  Saturday's data, which comes just three days after China raised interest rates for the third time this year, may prove to be the near-term peak for China's inflation as global commodity prices cool, but most economists were still pencilling in one more rate increase this year.

  The consumer price index for June rose 6.4 percent from a year earlier, slightly above economists' forecasts for a 6.3 percent increase, with sharp rises recorded in food, consumer goods and property.

  " We expect the central bank to raise interest rates once more in the fourth quarter,  as it did last year,  to help prevent  inflationary pressures from spilling over  into next year," said Qiao Yongyuan, an analyst at CEBM in Shanghai.

  Qiao noted record pork prices, a key driver of China's food inflation in recent months, are unlikely to ease anytime soon -- a view shared by pork producers due to a pig shortage. (For a feature on China's pork inflation, see )

  China's inflation data has become its most closely-watched indicator in recent months as investors look for clues on whether Beijing is about to shift its policy stance after nine months of steady tightening.

  With the U.S. and euro zone economies sluggish, China is one of the world's most powerful growth engines, and investors worry Beijing may jeopardize that by tightening policy too far.

  But analysts who argued Beijing is likely to keep raising rates noted China's economy is only slowing gently and is still seen growing by more than 9 percent in 2011. Given that, they say stubborn inflation is the bigger risk right now.

  China's inflation-adjusted interest rates are still negative. That encourages savers to funnel their money into other asset such as property instead of parking it in the bank, which can exacerbate price pressures, said Cui Yong, an economist with GF Securities in Beijing.

  Cui expects China's central bank to raise rates once more this year.

  A slim majority of analysts surveyed by Reuters this week thought China would raise rates once more this year before standing pat until June 2012.

 

  CLOSE CALL

  In June, pork prices alone lifted China's consumer price index by 1.4 percentage points, soaring more than 57 percent. Egg prices also jumped a steep 23 percent on the back of a seasonal squeeze in supply.

  Together, they raised overall food prices by about 14 percent, a pinch that would be felt by China's poor and a solemn reminder for Beijing that quickening inflation could stir social unrest, as did in the past.

  Worryingly, there were signs that inflation pressures were spreading and may persist even if global commodity prices continue to fall. Non-food prices climbed 3 percent in their biggest jump since records began in 2002.

  But given China has raised rates five times since October, alongside nine increases in the required reserve ratio for banks, some analysts said Beijing has already fired its pre-emptive shot at inflation.

  " With a coming decline in headline inflation and rising concern on growth, we believe the chance for a further rate hike this year is very small," said Ting Lu, an economist at Bank of America-Merrill Lynch.

  He argued that investors could take June's inflation report as a sign that price pressures in China may be peaking sooner than thought, thereby weakening the case for more rate rises.

  China must strike a delicate balance between sustaining powerful economic growth and ensuring inflation does not get out of hand. With global oil prices down about 17 percent since May 2, many economists think China's inflation will cool too.

  Friday's disappointing U.S. jobs report may have given Beijing even more cause for a pause. The rising unemployment rate suggests that the Federal Reserve will not be raising U.S. rates from near zero any time soon, so China may be wary of tightening policy too much lest it draw more hot money inflows.

  " This is very likely the peak in terms of CPI growth. I think the impetus for more tightening is getting pretty weak," said Ken Peng, an analyst at Citi in Beijing. (Additional reporting by Aileen Wang and the Beijing bureau)     (Reporting by Zhou Xin and Koh Gui Qing Editing by Emily Kaiser)

* U.S. June jobs report disappoints, weighs on oil

  * North Sea supply worry limits Brent losses

  * Brent premium to U.S. crude above $22/barrel intraday

  * Coming up: API oil stocks data, 4:30 p.m. EDT Tuesday (Recasts, updates prices, market activity to Brent settlement)

  By Robert Gibbons

  NEW YORK, July 8 (Reuters) - Oil ended a strong week on a downbeat note on Friday as a dismal U.S. jobs report cast a pall on the economic outlook.

  Benchmark Brent crude pared losses by mid-afternoon, closing near flat on the day as news of reduced North Sea production helped drive prices up nearly 6 percent this week. Brent's premium to U.S. crude pushed above $22 a barrel, within $1 of its all-time record three weeks ago.

  Trading was volatile while volume picked up from recent weak levels, with raw materials faring better than stock markets after news that U.S. jobs growth ground to a near-halt in June. Nonfarm payrolls rose only 18,000, the weakest reading since September and well below expectations.

  " The employment data has weighed mightily on oil prices. Employment trends are key to future demand, and this is now two months of poor data," said John Kilduff, partner at hedge fund Again Capital LLC in New York.

  " The (market's) only supportive feature is further declines in North Sea loadings. These outages coupled with Libya and Nigeria issues are increasingly meaningful," he said.

  Brent futures for August fell 26 cents to settle at $118.33 a barrel, off their $119.87 peak reached ahead of the U.S. jobs report but well above the $116.88 low. Brent posted a second straight weekly gain, rising 5.87 percent, after gaining 6.33 percent the previous week.

  A second week of strong gains has pushed prices well above the level prior to the release of global emergency stockpiles as traders bet the extra 60 million barrels of oil would be insufficient to stop markets tightening later this year.

  U.S. crude fell $2.47 to settle at $96.20 a barrel, below front-month crude's 30-day moving average of $96.84, but off its $95.60 intraday low. For the week, U.S. crude rose 1.33 percent, also a second straight weekly gain.

  Money managers raised their net-long U.S. crude futures and options positions in the week to Tuesday, the Commodity Futures Trading Commision said on Friday.

  After lagging early, U.S. crude trading volumes outpaced Brent's, though Brent surpassed its 30-day average, while U.S. volumes were on track to fall just short.

  " Brent seems to have more speculative interest in it, along with the North Sea problems and missing African barrels, and the demand in Asia for similar barrels," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

  TIGHT GLOBAL SUPPLY

  Output from the North Sea Forties oil stream will slip to a two-year low in August, further reducing supply of the crude that helps to set the Brent benchmark.

  Brent's strength indicates the need for sweet crude like Libya's, even though " an expected increase in (U.S.) Gulf Coast supply should theoretically reroute some African light sweet crude toward the higher-priced European market" , Jim Ritterbusch, president of Ritterbusch & Associates, said in a research note.

  Thursday's government inventory report showed U.S. crude and refined product stocks fell last week.

  Oil prices have rebounded from four-month lows following the International Energy Agency's (IEA) surprise announcement on June 23 that member nations would release 60 million barrels of oil reserves. The IEA said it would consider later this month whether to release more reserves.

  JP Morgan said in a report the timing of the IEA release threw a spotlight on tightness in global oil supply.

  " Politics aside, the main reason we can see for the precise timing of the IEA stock release was that it coincided with clear indications from tanker traffic data that OPEC output would fall short of prior pledges," the bank said in a report on Thursday.

  " As such, it is difficult to conclude anything except that there is little or no spare capacity in the oil market." (Additional reporting by Gene Ramos in New York, Simon Falush and Stephen Mangan in London and Francis Kan in Singapore Editing by Dale Hudson and David Gregorio)

By Caroline Valetkevitch

  NEW YORK, July 8 (Reuters) - Wall Street heads into earnings season next week playing a typical game: Worrying about results a lot, and then rallying on pleasant surprises.

  Analysts have been lowering earnings estimates of late and nervousness about the U.S. economic picture abounds, especially after Friday's poor June jobs report.

  However, profit growth could still be strong in the second quarter -- and that could boost stocks. The Standard & Poor's 500 fell 0.4 percent in the second quarter, but rallied in recent days on hopes for economic improvement.

  Over the last month, analysts have revised downward their earnings estimates for S& P 500 companies, with the mean change in earnings estimates a negative 6.4 percent, according to Thomson Reuters StarMine data.

  " I think there's going to be a lot of anxiety going into it, and I think companies are going to continue what they've done for the last few quarters: Put out better-than-expected numbers, and guidance should be OK," said Scott Billeaudeau, portfolio manager at Fifth Third Asset Management, in Minneapolis.

  S& P 500 components' earnings are expected to have increased an average of 7.3 percent in the second quarter from a year ago, down from first-quarter growth of 18.9 percent, Thomson Reuters data showed.

  But the number could jump if most companies beat analysts' forecasts. Early estimates for first-quarter profit growth were at about 13 percent.

  " The general economic data is suggesting some softness in the overall economy both globally and in the U.S. ... so that drives somewhat more realistic expectations for companies," said Natalie Trunow, chief investment officer of equities of Calvert Investment Management in Bethesda, Maryland, which manages about $14.8 billion.

  In the coming week, the Federal Reserve will release minutes of its June 21-22 policy-making meeting. Among the U.S. economic indicators on tap are June retail sales, June inflation readings from the U.S. Producer Price Index and the U.S. Consumer Price Index, industrial production and capacity utilization for June, and the preliminary July reading on consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers.

  BANKS UNDER THE GUN

  Financial services companies have seen the biggest downward revisions in earnings estimates in the last 30 days, with banks taking some of the biggest hits, including Goldman Sachs and Morgan Stanley.

  JPMorgan Chase will be the first of the big banks to report, with results due on Thursday. Results from top tech player Google also are expected Thursday, while aluminum company Alcoa unofficially starts the season with earnings after the bell on Monday.

  The S& P financial index dropped 6.3 percent in the second quarter as worries escalated about the impact of the euro-zone debt problems on the global economy. The mean change for earnings estimates in the sector in the last 30 days is a negative 34.4 percent, StarMine data showed.

  DISASTERS AND DISAPPOINTMENTS

  Analysts have also said the aftermath of Japan's earthquake, months of extraordinary weather in the United States, and rising food and commodity prices took a toll on companies in the second quarter.

  StarMine analysis showed companies, including Platinum Underwriters Holdings, were likely to disappoint with results because of tornado damage claims.

  But companies have kept costs in check and that should support stronger results, while also giving a boost to stock prices, he said.

  " I think things underneath the macro, global, political noise continue to percolate," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs. But " you're going to see higher-quality companies showing the surprises this quarter (versus) last."

  Based on his own analysis, he expects industrials and utilities to surprise to the upside, especially for companies involved in " machinery, and roads and rails" and for electric utilities.

  On the flip side, he sees a high probability for earnings disappointments in health care, consumer staples and materials sectors.

  An S& P health-care index led gains in the S& P 500 in the first half of the year as the market shifted to defensive shares, with the sector up 14 percent since the start of the year, followed by an S& P energy index, up 11 percent.

  The health-care sector may be subject to profit-taking once earnings start after its strong run so far this year, according to Tobias Levkovich, Citigroup's chief U.S. equity strategist, who made the point in a research note.

  Some analysts expect total upside surprises to be less than in previous quarters, with the percentage of companies beating expectations likely to fall in the mid-60s percentage range, below the 70-percent range, where it has been.

  S& P 500 earnings overall could beat estimates by a " modest" 1 percent to 3 percent, Charles Blood, senior market strategist at Brown Brothers Harriman, wrote in a research note.

  " Margins typically rise in the second quarter, but our primary concern and one of the biggest investment debates, is, 'How much room do companies have for further improvement?'" he wrote.

  (Wall St Week Ahead appears every Friday. Questions or comments on this column can be e-mailed to: caroline.valetkevitch@thomsonreuters.com) (Reporting by Caroline Valetkevitch Editing by Jan Paschal)

* FTSEurofirst 300 closes 0.2 pct higher

  * Automakers feature among top gainers banks fall

  By Brian Gorman

  LONDON, July 4 (Reuters) - LONDON, July 4 (Reuters) - European shares extended a winning run to six sessions on Monday, as worries about Greece receded further, though strategists said wider deficit issues might limit further gains for equities.

  The FTSEurofirst 300 index of top European shares rose 0.2 percent to 1,121.58 points, the highest close in a month.

  The index, which surged 4.2 percent last week, is in the middle of a range defined by its 2011 high of mid-February and its low of mid-March.

  Volume was low, at 56.6 percent of the index's 90-day average, with no direction provided by Wall Street, closed for the Independence Day holiday.

  Volkswagen AG < VOWG_p.DE> rose 2.1 percent after it clinched a 55.9 percent stake in Munich-based truckmaker MAN SE , clearing the way for the carmaker to start building its European truck empire.

  " Equity markets will go higher. The Greek debt restructuring is obviously on hold," said Bob Parker, senior adviser at Credit Suisse.

  " I don't think people are taking seriously the statement from S& P, that there is a selective default. On corporate earnings, people are being a little bit too pessimistic now."

  Credit rating agency S& P said Greece would likely be in default if it follows a debt rollover plan pushed by French banks as it would involve losses to debt holders, most likely earning Greece a " selective default" rating.

  Parker added shares might remain range-bound with progress impeded by issues such as the U.S. debt ceiling.

  Other carmakers to rise included BMW , up 1.6 percent. The STOXX Europe 600 Autos Index rose 1.7 percent.

  Germany's car market is set for further growth in the second half of the year after strong sales in June, an industry group said on Monday, sounding a bright note in contrast with other western markets.

  Across Europe, Britain's FTSE 100 and Germany's DAX rose 0.5 and 0.3 percent respectively France's CAC40 fell 0.1 percent.

  The Thomson Reuters Peripheral Eurozone Countries Index fell 0.8 percent.

 

  MALAISE

  Some strategists remained cautious, however.

  " Some clarity on the sovereign bailout front is welcome, but the wider economic malaise continues. Ahead of the earnings season we're nervous about earnings-per-share downgrades in some industrial cyclicals," said RBS in a note.

  RBS said it found it " strange that industrials and chemicals have performed so well relative to the wider market, given the global macro trends" .

  Banks gave up some of their strong gains from last week. The STOXX Europe 600 Banking Index fell 0.6 percent. Lloyds , Royal Bank of Scotland and UniCredit fell between 1.4 and 1.8 percent.

  Other factors that Parker said would be positive for equities included emerging markets having stopped monetary tightening, and more mergers and acquisitions.

  He added: " Investors are still very long on cash despite last week's rally, and equities are attractive relative to bonds."

  The Euro STOXX 50 , the euro zone's blue-chip index, however, fell 0.2 percent to 2,870.19 points after failing to break the 100-day moving average.

  Dmytro Bondar, technical analyst at RBS, said Monday's correction could potentially extend to 2,840, the 50-day moving average, but the daily momentum was still bullish.

  " Once 2,887 is cleared, the index will be likely to continue the uptrend to 2,950 and 2,990," he said.

  (Additional reporting by Atul Prakash Editing by David Hulmes) ============================================================ For rolling updates on what is moving European shares please click on ============================================================ For pan-European market data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. STOXX Europe index.................................. Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................

  Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. CAC-40............... World Indices.....................................< 0#.INDEX> Reuters survey of world bourse outlook......... Western European IPO diary......................... European Asset Allocation........................ Reuters News at a Glance: Equities................. Main currency report:.................................

* World stock hits 4-1/2 high S& P warns on Greece default

  * Speculators cut net long in ICE Brent crude

  * Largest North Sea oilfield ramping up output (Update prices, IEA)

  By Ikuko Kurahone

  London, July 4 (Reuters) - Oil prices were steady on Monday on firmer global share prices, but trade was muted by the United States Independence Day holiday despite negotiations between the Libyan government and rebels and Greek debt concerns.

  U.S. crude < CLc1> was 7 cents up at $95.01 a barrel by 1633 GMT. ICE Brent crude < LCOc1> was 17 cents lower at $111.60 a barrel.

  Oil prices have been supported by gains in global equity markets since last week, Christopher Bellew, oil trader with Jefferies Bache, said. " I think the stock market rebound indicates some confidence in growth," he said.

  The MSCI world equity index rose 0.1 percent to hit its highest since June 1.

  European shares rose for a sixth straight session on Monday on expectations that U.S. economic recovery remained on track, although banks fell on Standard & Poor's negative view over the private sector involvement in a second Greek bailout package.

  The euro slipped from one month high against the dollar.

  The oil market would have been more volatile if U.S. markets had not shut on Monday, some analysts said.

  " With U.S. markets closed for the Independence Day, we are not likely to see much direction in prices today and trade near the previous day's close," Harry Tchilinguirian, BNP Paribas' head of commodity markets strategy, said.

 

 

  U.S. GASOLINE DEMAND

  Analysts also pointed out that oil's fundamentals remained relatively weak.

  The Independence Day holiday is traditionally seen by oil traders as marking the height of U.S. gasoline demand. However, U.S. travel group AAA said in late June road travel at the weekend would fall 2.5 percent from a year ago as expensive gasoline eats at driving demand.

  " U.S. refiners will be praying that plenty of drivers hit the road over the holiday weekend to give a boost to weary gasoline demand fundamentals. However, projections are not very hopeful," JBC Energy said in its research note.

  The International Energy Agency's (IEA) emergency stock release continued to be a focus for oil markets.

  The tender to sell crude oil from U.S. strategic petroleum reserves (SPR) as a part of the IEA stock release was oversubscribed by active bids.

  But analysts pointed out a lack of coordination and transparency outside the United States and that the full volume of 60 million barrels may not be absorbed due to globally weak demand.

  The IEA told a news briefing on Monday that it hoped a very sizeable portion of its oil stock release will be taken up by the market.

 

  ICE DATA

  Speculators betting on oil cut net-long positions in the week to June 28 in a continuation of the previous week's trend, data from the IntercontinentalExchange (ICE) showed on Monday.

  Data from the U.S. Commodity Futures Trading Commission (CFTC) on Friday also showed hedge funds and other large speculators cut their net long U.S. crude futures and options positions in New York and London last week to the lowest level since November as prices slid.

  U.S. oil inventory data from industry group the American Petroleum Institute and the government's Department of Energy will be delayed by a day to Wednesday and Thursday, respectively, due to the Independence Day holiday.

  In Libya, whose crude export disruption led to the IEA stock release, the government has had meetings in foreign capitals with representatives of the opposition to try to negotiate a peace deal, a spokesman for Muammar Gaddafi's administration said on Monday.

  In the North Sea, oil output at the UK's largest oilfield, the Buzzard field, resumed at the weekend after a brief stoppage last week, trading sources said on Monday. (Additional reporting by Francis Kan in Singapore editing by William Hardy)

LONDON (Reuters) - European shares steadied on Friday after a four-day rally, as worries about Greece's debt crisis receded, and boosted by strong U.S. economic data.

  At 0712 GMT, the FTSEurofirst 300 index of top European shares was flat at 1,111.01 points, after rising 1.1 percent in the previous session to its highest close in four weeks, buoyed by the Greek parliament voting to adopt austerity measures, and so averting bankruptcy.

  However, the index fell 1.2 percent in the second quarter.

  Danish wind turbine maker Vestas soared 8 percent after signing a major framework deal to supply French renewable energy group EDF Energies Nouvelles with turbines in 2012-2014.

  " There's relief Greece hasn't gone bad. But there's also nervousness, as we look to see whether the U.S. consumer is showing may more confidence or not," said Justin Urquhart Stewart, director at Seven Investment Management.

  " There's a recovery but it's lower and slower. Where does the growth come from? China is slowing. The market will go sideways. There's no impetus to push it up. Q2 corporate earnings should be good, but the outlook statements may not be so encouraging."