Oil back near $70 in Asian trade

SINGAPORE: Oil surged back near 70 dollars in Asian trade on Wednesday on better retail sales in the United States and bargain-buying following recent price falls.

New York's main futures contract, light sweet crude for delivery in September, was up 79 cents to 69.98 dollars a barrel in morning trade.

Brent North Sea crude for October delivery gained 44 cents to 72.81 dollars.

Crude prices rallied as traders returned to the market following a slump that saw oil dip well below the psychological 70-dollar level, analysts said.

"It's the same old story," said Tony Nunan, an energy risk manager at Mitsubishi Corp in Tokyo.

"When we have a large drop (in prices), it seems that people come in the next day (and buy) based on the economic recovery story."

Nunan said better-than-expected performances posted by major US retailers such as DIY firm Home Depot Inc also helped boost prices as it was seen as a sign of improving US consumer confidence.

Home Depot raised its forecast for fiscal 2009 after reporting a less-than-expected 7.2 per cent decrease in earnings in the second quarter compared to the same period last year.

The company said it expected earnings per share of between zero to 7 per cent over last year. It previously forecast a loss of between 0 and 7 per cent.

However, Nunan warned that a large crude stockpile in the United States will continue to weigh down on prices amid weak energy demand.

Consumption patterns in the United States can influence prices because the US economy is the world's biggest energy user.