Oil near $71 as stocks bolster confidence

[May 24, 2010]  SINGAPORE (AP) -- Oil prices rose to near $71 a barrel Monday in Asia as recovering stock markets bolstered the confidence of crude traders.

Benchmark crude for July delivery was up 87 cents to $70.91 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 76 cents to settle at $70.04 on Friday.

Higher stock prices in most Asian markets Monday helped buoy oil since traders look to equities as a barometer of overall global investor confidence. The Dow Jones industrial average gained 1.3 percent Friday.

Crude has fallen about 20 percent from $87.15 earlier this month as investor concern about Europe's debt crisis hammered global stocks and the euro. Oil is up from as low as $64.24 a barrel last week as the euro steadied.

Oil plunged to $32 a barrel in December 2008 from $147 five months earlier as a financial crisis in the U.S. triggered a global recession.

"Without stronger economic growth, it will be very hard to build a bullish picture for the oil markets," Cameron Hanover said in a report. "We now believe that the entire move from $32.70 to $87.15 was a correction in a bigger bear market."

In other Nymex trading in June contracts, heating oil rose 1.34 cent to $1.911 a gallon, and gasoline gained 1.37 cent to $1.975 a gallon. Natural gas was up 1.3 cent at $4.05 per 1,000 cubic feet.

In London, the Brent crude July contact was up 51 cents to $72.19 on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

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