* S&P warns on Greece default
* Libya govt in talks, but sides entrenched over Gaddafi
* Speculators cut net long in ICE Brent crude (Rewrites first paragraph, updates prices)
By Ikuko Kurahone
London, July 4 (Reuters) - Oil was little changed in paltry trade on Monday as a sixth day of gains in European shares boosted hopes for stronger growth, supporting last week's rise.
With ICE Brent crude volume at around one-fifth its 30-day average due to the U.S. Independence Day holiday, markets showed little reaction to renewed anxiety over Greece stemming from a Standard & Poor's warning, or tenuous signs of peace talks between the Libyan government and rebels.
ICE Brent crude
U.S. crude
Oil prices have been supported by gains in global equity markets since last week, said Christopher Bellew, oil trader with Jefferies Bache. "I think the stock market rebound indicates some confidence in growth," he said.
The MSCI world equity index <.MIWD00000PUS> rose 0.5 percent to its highest since June 1, gaining more than 5.6 percent in six days, its best such run in a year.
European shares rose on expectations that U.S. economic recovery remained on track, although banks fell on Standard & Poor's negative view on the private sector involvement in a second Greek bailout package. [.EU]
The euro dipped from a one-month high against the dollar. [FRX/]
While S&P's warning that it would treat a French bank plan for a rollover of privately held debt as a default did not deal a death blow to the complex plan, it highlighted the difficulty of arranging private sector involvement in a second rescue package. [ID:nL6E7I408N]
In Libya, early hope that peace talks could soon end a five-month conflict that has halted the OPEC member's oil exports appeared to fizzle as both sides stuck to entrenched positions on the fate of Muammar Gaddafi. [ID:nL6E7I4040]
The Libyan government said on Monday it was in talks with opposition figures, but the leader's son Saif al-Islam told a French newspaper there was no question of negotiating an end to his father's 42-year rule. The rebels, stepping back from a hint of a concession, renewed their demand that he go now.
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For a 24-hour technical outlook on WTI:
http://graphics.thomsonreuters.com/WT1/20110407085404.jpg
For a 24-hour technical outlook on oil:
http://graphics.thomsonreuters.com/WT1/20110407091651.jpg
Graphic package on reserves: http://r.reuters.com/xew32s
IEA oil stocks release PDF: http://link.reuters.com/jac42s
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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. [ID:nN1E75K1CX]
"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. [ID:nN1E76014L]
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. [ID:nN1E76014L]
The IEA told a news briefing on Monday that it hoped a very sizable portion of its oil stock release will be taken up by the market. [ID:nL6E7I41RJ]
ICE DATA
Speculators betting on oil reduced 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 that 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. [ID:nN1E7601MR]
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. [EIA/S] (Additional reporting by Francis Kan in Singapore and Jonathan Leff in New York; Editing by William Hardy and Steve Orlofsky)