SINGAPORE, Sep 01, 2009 (AFP) - Oil rebounded modestly in Asian trade Tuesday after overnight declines that were caused by fresh worries about the global economic recovery, analysts said.
New York's main contract, light sweet crude for October delivery was 40 cents stronger at 70.36 dollars a barrel.
Brent North Sea crude for October delivery added 43 cents to 70.08 dollars a barrel.
Both contracts had closed below 70 dollars Monday after a sharp Chinese equity sell-off triggered worries about the global economy's recovery from recession, analysts said.
"The declines on Chinese equity markets tarnished oil market sentiment... Chinas economic growth has been fuelling strong oil imports into China," said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.
The Shanghai Composite Index plunged 6.74 percent Monday, its biggest one-day drop since June 2008, amid concerns over slowing lending growth and a new share supply glut.
Crude prices rose last week -- helped mainly by hopes of an economic recovery that should mean greater oil consumption -- and China was seen as among the key energy users that would boost demand, analysts said.
But the stocks plunge in China struck "a blow deep into the heart of expected oil demand growth," said Phil Flynn of PFG Best Research.
"Despite the winning ways of the US stockmarket, oil traders are increasingly focused on Asia which has had a rough go as of late," he said.
"The market is concerned whether or not the Chinese government can engineer a soft landing."
Crude prices see-sawed last week, on Tuesday hitting 75 dollars for the first time in 10 months before falling sharply.
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Copyright AFP 2009.
