London: Oil reversed early losses on Wednesday to rise back towards $70 (Rs3,409) a barrel, as data showing oil demand is recovering in the US outweighed doubts about the strength of the global economy.
By 8pm, US crude for September delivery was up 26 cents at $69.45 a barrel. London Brent crude for October was down 1 cent at $72.34. Prices had fallen earlier on Wednesday, hitting a low of $68.05 after a near 5% slump in Chinese shares sent doubts rippling through global markets about the strength of the world economic recovery.
But a report from the American Petroleum Institute showing US oil demand is now down 3% year-on-year, compared with an average decline of around 6% in the first half of 2009, saw prices reverse higher. The dollar’s drop against the euro also boosted prices, as dollar-denominated commodities such as oil become cheaper for holders of other currencies.