Oil back near 70 dollars in Asian trade

New York's main futures contract, light sweet crude for delivery in September, was up 79 cents to USD 69.98 a barrel in morning trade.

Brent North Sea crude for October delivery gained 44 cents to USD 72.81.

Crude prices rallied as traders returned to the market following a slump that saw oil dip well below the psychological 70-dollar level, analysts said.

"It's the same old story," said Tony Nunan, an energy risk manager at Mitsubishi Corp in Tokyo.

"When we have a large drop (in prices), it seems that people come in the next day (and buy) based on the economic recovery story."

Nunan said better-than-expected performances posted by major US retailers such as DIY firm Home Depot Inc also helped boost prices as it was seen as a sign of improving US consumer confidence.

Home Depot raised its forecast for fiscal 2009 after reporting a less-than-expected 7.2 per cent decrease in earnings in the second quarter compared to the same period last year.