Oil prices trading at $71 mark, following stock markets

Crude oil prices rose to near $71 a barrel in early trading on Monday as recovering stock markets bolstered the confidence of crude traders.

US Light crude oil futures rose to $70.69 a barrel at 12:30pm Singapore time on the NYMEX, while in London, Brent crude oil futures for July settlement rose to $71.95 a barrel on the ICE Futures Exchange.

“There has been a significant decline in oil prices over the past couple of weeks so there might be some traders who think that oil has been oversold and are looking to buy in at these levels,” said Toby Hassall, chief commodities analyst at CWA Global Markets Pty Ltd.

“Oil could remain as the casualty of negative sentiments in the short term, but it should rebound when the panic subsides because we’re still seeing strong growth in Asia and the U.S. economy is also slowly recovering.”

“You’re seeing a good, fast response back into the equity markets,” said David Land, chief market analyst at CMC Markets Ltd. in Sydney. “If there is renewed expectation that we’ll see a cooling in the situation in Europe, that will translate into a bit of upside for the oil price.”

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