Oil hovers near $67 in Asia as stocks rebound

[September 29, 2009]  SINGAPORE (AP) -- Oil prices hovered near $67 a barrel Tuesday in Asia as regional stock markets rebounded and investors awaited a slew of data on the U.S. economy.

Benchmark crude for November deliver was up 14 cents at $66.98 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 82 cents Monday to settle at $66.84.

Regional stock markets, often a barometer of optimism about economic prospects, rebounded from a sharp fall Monday after corporate takeovers boosted Wall Street to a higher close.

Also pushing up oil prices was the West's recent stern warning to Iran over a previously unknown nuclear facility. About 20 percent of the world's crude moves through the Straits of Hormuz on Iran's southern coast and any showdown between the West and Iran could threaten that route.

"Investors are still buying on dips around the mid-$60s level. Most people are reasonably confident that over the next 12 months oil is going to move higher," said Ben Westmore, energy analyst with National Australia Bank in Melbourne. "The gains in the U.S. equity markets also helped."

Westmore expects oil will average $80 a barrel in the third quarter of 2010.

"We're expecting a long recovering period, not a V-shaped recovery, but over 2010 we expect positive outcomes in the big developed economies, and oil demand will pick up," he said.

In the U.S., the most closely watched indicator this week will be the Labor Department's monthly jobs report on Friday. Reports also are due out on home prices, manufacturing, consumer confidence, construction spending and factory orders.

In other Nymex trading, heating oil fell 0.55 cent to $1.69 a gallon. Gasoline for October delivery was steady at $1.63 a gallon.

In London, Brent crude rose 10 cents to $65.65 the ICE Futures exchange.

[Associated Press; By ALEX KENNEDY]

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