Oil prices bounce back above $70

Oil prices rebounded slightly today, a day after tumbling on fears crude demand growth could weaken in China, the world's second biggest oil consuming nation after the United States, traders said.

New York's main contract, light sweet crude for October delivery rose 57 cents to $70.53 a barrel.

Brent North Sea crude for October gained 66 cents to $70.31 a barrel in early London trade.

Oil prices had slumped to below $70 by the close yesterday after losing around $3 as a stock market plunge in China sent jitters across world markets about prospects for global economic recovery.

"If the Chinese economy were to stutter it would be disastrous for oil demand growth as the Asian dragon is the world's second largest oil consumer and has so far been perceived as a shining beacon of economic recovery," analysts at JBC Energy wrote in a research note to clients published today.

Chinese shares closed up 0.60% today on bargain-hunting, a day after the key index suffered its biggest single-day percentage loss in 14 months, dealers said.

The stocks plunge in China struck "a blow deep into the heart of expected oil demand growth", said Phil Flynn of PFG Best Research.