Oil rebounds in Asia after overnight falls

SINGAPORE, Sept 30, 2009 (AFP) - Oil rebounded in Asian trade Wednesday after overnight falls in reaction to weaker US consumer confidence, analysts said.

New York's main contract, light sweet crude for November delivery, rose 26 cents to 66.97 dollars a barrel.

Brent North Sea crude for November delivery gained 29 cents to 65.78 dollars a barrel.

Crude prices tumbled Tuesday after a widely watched US consumer confidence index fell to 53.1 in September from 54.5 in August, overshadowing some positive data on the housing front, analysts said.

The figure was weaker than the 57.0 expected on Wall Street, and suggested consumers may be cautious in resuming spending, which is key to economic recovery.

"Lack of conclusive data led to a situation where on one hand commodities and equities mostly inched down, but on the other corporate credit was mixed and emerging market assets gained," said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial firm.

"Clearly, while US and global recovery is continuing, it is being built on a shaky ground. We bet that it will continue, but inconsistent macroeconomic indicators will keep investors on edge."

Investors are awaiting other key data to be released this week for a better gauge on the pace of recovery in the US, the world's biggest energy user.

The US Department of Energy is due later Wednesday to release its weekly oil inventory report and analysts polled by Dow Jones Newswires expect crude stocks to have risen by 300,000 barrels in the past week.

Gasoline stocks are tipped to increase by 800,000 barrels while distillate stocks, which include heating oil and diesel, are seen to rise by 1.1 million barrels, according to the analysts polled.

Last week, oil prices fell eight dollars amid concerns over rising supplies and continued weak demand.

Demand plunged after the global economy slipped late last year into its worst recession since the 1930s.

This sent oil prices tumbling from historic highs of more than 147 dollars in July 2008 to around 32 dollars in December. Prices have since recovered but investors remain concerned over the pace of the upturn.

Source: AFP

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