Oil rebounded in Asian trade on Thursday, lifted by strong regional stocks, which rallied after US aluminium giant Alcoa said it swung to profit in the third quarter.

New York's main contract, light sweet crude for November delivery, was up 83 cents to $70.40 a barrel in morning trade.

Brent North Sea crude for November delivery climbed 82 cents to $68.02.

"Oil is drifting up as Asian stock markets are also trading higher," said Victor Shum, a senior principal with energy consultancy Purvin and Gertz in Singapore.

He said news that Alcoa had returned to profitability after three consecutive quarters of losses drove stocks and oil prices higher.

Alcoa said its net income was $77-million, compared with a net loss for the second quarter of $454-million.

It was the first company in the blue chip Dow Jones Industrial Average index to announce results for the September quarter.

Revenues were $4.6-billion compared with $4.2-billion in the second quarter, a nine percent increase, Alcoa said in a statement.

Alcoa's report is "very positive and this really marks a strong start for the third quarter corporate earnings season," Shum said.

"This sparked the stock markets in Asia to turn up and oil has gained along with them," he added.

Oil prices hovered around $70 a barrel, amid continuing concerns over the strength of the recovery from the recession that struck the world economy last year, Shum said.

The recession crushed energy demand and sent oil prices plunging from historic peaks of more than $147 a barrel in July 2008 to around $30 a barrel in December, before they started to claw up.

"Oil remains in a tight range above the $70 level, which is the result of the weak supply-demand balance and concerns over the pace of economic recovery," Shum said.

The oil market will continue to seek guidance from third quarter corporate results in the coming weeks, he said.

AFP

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