Oil recovers but remain below 67 dollars

September 25, 2009 05:30:06 PM

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Oil rebounded in Asian trade Friday after overnight declines triggered by fresh concerns about the pace of recovery in the US economy, the world's largest energy user, analysts said.

New York's main contract, light sweet crude for November delivery, rose 40 cents to 66.28 dollars a barrel.

Brent North Sea crude for November delivery put on 59 cents to 65.41 dollars.

Underlying worries about US energy consumption persist despite the slight uptick in crude prices which are likely to remain below 70 dollars a barrel in the immediate term, analysts said.

Worries about the pace of the US economic recovery intensified after data released Thursday showed existing home sales fell 2.7 percent in August to 5.10 million units from the previous month.

In the past four months, sales had risen a total of 15.2 percent, the National Association of Realtors said.

"US existing home sales disappoints," said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial house.

"This was particularly surprising given that pending home sales suggested further gains, and indicates delays in completions of transactions."

Crude prices lost about three dollars in Wednesday trade in reaction to an unexpected buildup in US crude stocks, which is seen as an indication of weak demand.

The US Department of Energy (DoE) said crude reserves increased 2.8 million barrels in the week to September 18, confounding analysts' expectations for a decline.

The DoE weekly report said US stocks of distillates, which include heating fuel, rose by three million barrels last week.

Distillates are being closely monitored ahead of the northern hemisphere winter when demand for heating fuel peaks.