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| Oil remains below $70 after overnight declines |
| Press Trust of India / Singapore Sep 02, 2009, 10:05 IST |
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Oil recovered in Asian trade today but was still below $70 amid worries about energy demand, analysts said.
New York's main contract, light sweet crude for October delivery was 52 cents higher at $68.57 a barrel.
Brent North Sea crude for October delivery advanced 24 cents to $67.97.
The two contracts closed lower yesterday, mirroring losses in global equities markets on investor concerns over the pace of recovery in the US and
China, the world's top two energy users.
Crude prices briefly hit $75 a barrel last week, its highest level in 10 months, but soon fell as analysts questioned the strength of underlying
supply-demand forces.
"Inventory levels are still very high and there is a lot of spare OPEC capacity so the supply crunch is definitely not imminent," said Victor Shum, a
Singapore-based analyst with energy consultancy Purvin and Gertz.
"Oil simply would not hold above $75 because investors started to focus a lot more on the fundamentals," he said.
In the near-term, crude prices are likely to trade in the $65-70 range, Shum said.
Oil market traders have looked to China to support an expected rebound in global oil demand in 2010, after two years of contraction.
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