SINGAPORE, Jul 22, 2009 (AFP) - Oil eased in Asian trade Wednesday after recent gains fuelled largely by an upsurge in global stock markets, analysts said.

New York's main contract, light sweet crude for September delivery, fell 49 cents to 65.12 dollars a barrel. Brent North Sea crude for September delivery was 46 cents weaker at 66.41 dollars.

The US Department of Energy (DoE) was to release its weekly oil reserves report later Wednesday with investors having already priced in a likely drop in crude stocks, analysts said.

A drop in US crude stocks is seen as an indication of demand picking up in the world's biggest energy user.

Beyond the DoE report, investors were closely watching US Federal Reserve chairman Ben Bernanke's ongoing semi-annual economic report to Congress for clues on the state of the US economy.

Bernanke told lawmakers Tuesday there were "notable improvements" in financial markets and a somewhat brighter economic outlook but considerable risks led by high unemployment.

"In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery," Bernanke told the House of Representatives Financial Services Committee.

Analysts said Bernanke's comments to Congress suggested the economy was on the mend but it was still not yet strong enough for an end to the unprecedented stimulus spending package.

His comments also suggested the Federal Reserve would maintain its aggressive stand for some time, analysts said.

"The present focus of policy remains on stimulating economic activity," said economist Nigel Gault at IHS Global Insight.

Ryan Sweet at Moody's Economy.com said Bernanke's comments indicate "that both the economy and financial system are too weak for the central bank to begin tightening monetary policy."

"His downbeat assessment of the labor market is noteworthy, as it could determine when the central bank begins tightening monetary policy," Sweet added.

Bernanke's two-day congressional testimony ends later Wednesday.

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Copyright AFP 2009.