Oil prices rebound sharply

13th July 2010, Comments 0 comments

World oil prices rebounded Tuesday above 75 dollars, in line with soaring European equities, as traders anticipated upbeat US company results and falling American crude reserves, analysts said.

New York's main contract, light sweet crude for delivery in August, jumped 93 cents to 75.88 dollars a barrel.

London Brent North Sea crude for August soared 1.17 dollars to 75.54 dollars.

Prices had languished below 75 dollars in early trade on Tuesday as the market fretted over the strong dollar and US demand concerns.

"Oil prices initially received some pressure from a strengthening US dollar but easily recovered and traded above 75 dollars per barrel, supported by a rebound in the global equity markets and amid expectations of a further drawdown in (US) crude oil inventories," said Sucden analyst Myrto Sokou.

"Market participants might focus on the US earnings results from Intel today and JP Morgan later this week for further signs of the global economic conditions that could affect oil demand levels in the near term," Sokou added

European equities rallied Tuesday as investors shrugged off downbeat eurozone news to focus on hopes of improving US company results after better-than-expected earnings from aluminium giant Alcoa.

Alcoa said it booked a second quarter net profit of 136 million dollars compared with a loss of 454 million dollars a year ago. Investor attention is now on microchip giant Intel, which reports later Tuesday.

The US Department of Energy will meanwhile publish its weekly report on American oil stockpiles on Wednesday.

Elsewhere on Tuesday, traders digested the latest monthly report from the International Energy Agency (IEA), the energy strategy arm of the Organisation for Economic Cooperation and Development.

Sokou said: "The (IEA) monthly report weighed on investor sentiment this morning after saying that it estimates global oil demand growth to slow in 2011, citing comfortable oil supplies worldwide."

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© 2010 AFP

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