Oil bounces back above $70

Wednesday, September 02, 2009

LONDON: Oil prices rebounded slightly on Tuesday, a day after tumbling on fears that crude demand growth could weaken in China, the world s second biggest oil consumer after the United States, traders said. New York s main contract, light sweet crude for October delivery rose 30 cents to $70.26. Brent North Sea crude for October gained 55 cents to 70.20 dollars a barrel around midday trade in London. Oil prices had slumped to below 70 dollars by the close on Monday after losing around three dollars as a stock market plunge in China sent jitters across world markets about prospects for global economic recovery. If the Chinese economy were to stutter it would be disastrous for oil demand growth as the Asian dragon is the world s second largest oil consumer and has so far been perceived as a shining beacon of economic recovery, analysts at JBC Energy wrote in a research note to clients published Tuesday. But there was better news for China on Tuesday as official data showed the country s manufacturing activity had expanded in August at its fastest pace in 16 months, signalling that the world s third largest economy is stabilising.

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