(NEW YORK, USA) - World oil prices rose Tuesday, rebounding from an initial sell-off as fears of the European debt crisis abated and oil traders took their cue from rising stock markets.
New York's main contract, West Texas Intermediate for delivery in August, gained $2.28 to close at $97.43 a barrel, making a strong bounce after it dropped as low as $93.55 in early trading.
In London, on the IntercontinentalExchange, Brent North Sea oil for August delivery climbed 51 cents to close at $117.75 a barrel.
Prices initially fell on worries that Europe's debt crisis was spreading to Italy, the eurozone's third-largest economy, threatening broader financial turmoil that could lower European energy demand.
But they rebounded on market rumors that the European Central Bank was buying the bonds of distressed European governments, said Bart Melek, an analyst with TD Securities.
"We went from terrible to okay. There (was) a lot of selling earlier in the day on this issue of potential problems on the Italian bond market," Melek said.
Yields on Italian and Spanish government debt have surged in recent days, shaking confidence in the eurozone's finances.
Oil prices also jumped immediately after the US Federal Reserve released minutes indicating that it planned only a gradual easing of its ultra-loose monetary policy.
Another boost came after OPEC forecast steady demand growth for oil next year.
Demand for oil this year would be 88.18 million barrels per day, rising to 89.50 million barrels in 2012, OPEC said.
But the oil export cartel commented: "An unsteady world economy is negatively affecting the oil market and imposing a high range of uncertainty for the short term."
