Oil rises above $70

I / Singapore July 1, 2009, 11:08 IST

Oil rebounded in Asian trade today after falling overnight on figures showing declining consumer confidence in the United States, the world's biggest energy user, analysts said.     

New York's main contract, light sweet crude for August delivery rose 66 cents to $70.55.

Brent North Sea crude for August delivery advanced 75 cents to $70.05.     

Analysts expect the rebound in crude prices, coming mainly on the back of investors looking for an alternative to equities, to be temporary amid fresh worries about US energy demand.     

"Markets have paused for breath over the past month as risk appetite has begun to show signs of waning," analysts from London-based Capital Economics research house said in a report.     

"We had not expected investors to lose their enthusiasm quite so soon. We suspect that investors will be ultimately disappointed by the strength of the economic recovery, which is likely to feed back into greater risk aversion later in the year."     

It said commodities including oil "have generally continued to do well, although the rally is now running out of steam."