By Barani Krishnan
NEW YORK (Reuters) - Crude futures rallied about 1 percent in New York trade on Tuesday, reversing losses from the European session and latching onto a rebound in oil products ahead of U.S. inventory data expected to show strong demand for gasoline.
Also supporting prices were signs of trouble with an impending Iranian nuclear deal that could delay Tehran's hopes of lifting Western sanctions on its oil exports.
Futures of Brent crude were up 76 cents, or 1.3 percent, at $64.10 a barrel by 10:54 a.m. EDT.
U.S. crude futures rose 50 cents, or 0.8 percent, to $60.88.
Futures of gasoline surged 1.6 percent, breaking past the 100-day moving average, to lead the oil complex higher. Ultra-low sulfur diesel surged almost 1.8 percent.
"All of the action remains in products," said Scott Shelton, a crude broker with ICAP in Durham, North Carolina.
The oil products markets have been extraordinarily strong since the start of the peak U.S. driving season at the end of May, which typically translates to higher demand for fuels.
U.S. gasoline inventories were seen to have fallen 400,000 barrels last week, while refinery utilization rates were seen to have risen 0.7 percentage point from 93.1 percent, a Reuters poll showed ahead of official inventory data due on Wednesday.
U.S. commercial crude oil stocks were also expected to have fallen for an eighth straight week, the poll indicated.
In Iran, the parliament passed a bill banning access for U.N. inspectors to its military sites and scientists.
A New York-based crude broker said the bill was "an indication that Iran nuclear may be running into some difficulties" in meeting a self-imposed June 30 deadline nuclear accord with world powers to resume crude exports.
Two major stumbling blocks to a deal have been disputes over how much transparency Iran should offer to ease suspicions that it has covertly sought to develop nuclear bombs, and the timing and pace of relief from sanctions imposed on Tehran.
(Additional reporting by Simon Falush in London and Keith Wallis in Singapore; Editing by William Hardy, Susan Fenton and Marguerita Choy)
