Oil bounced back from seven-month lows in Asian trade on Tuesday as cheaper prices spurred investors back into buying mode, analysts said.
New York's main contract, light sweet crude for delivery in June, added 57 cents to USD 70.65 a barrel. The contract briefly plumbed to 69.27 in the US yesterday, its lowest level since October 5, 2009.
London's Brent North Sea crude for July was up 72 cents at USD 75.82.
The market's daily movements in the past few days were driven by investor behaviour rather than the supply and demand balance, said Ben Westmore, a Melbourne-based energy economist with the National Australia Bank.
"After falling quite heavily in the last few days, there seems to be some stabilisation in the price and... that
has to do with investors just buying on weakness," he said.
Prices have fallen sharply since touching a 19-month high of USD 87.15 a barrel on May 3 as mounting concerns over the eurozone debt crisis sent the euro slumping to a four-year low against the US dollar.
A stronger greenback makes dollar-priced crude more expensive for buyers using weaker currencies, denting demand, which leads to lower oil prices.
Westmore said the price outlook for oil remains subdued, as concerns over the eurozone's finances would continue to weigh on the market.
"I don't think that the uncertainties that surround some of the eurozone and the euro has abated," Westmore said.