AFP: Oil & pessimism

Singapore, July 14, 2009 (AFP) - Oil recovered in Asian trade Tuesday but continued pessimism on the weak global economy will keep a lid on further price gains, analysts said.

New York's main contract, light sweet crude for August delivery, advanced 38 cents to 60.07 dollars a barrel.

Brent North Sea crude for August delivery gained 39 cents to 61.08 dollars.

Both contracts closed weaker Monday on concerns over the pace of recovery in the global economy, especially in the United States.

Analysts said any gains were likely to be capped due to caution over US energy demand and would be short-term in nature. The United States is the world's biggest economy and its largest energy consumer.

"Oil markets remain concerned that economic recovery in the main developed economies is likely to be a slow grind," said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.

Weak energy demand in the United States has been a dominant theme since recent data suggested its economy remained fragile despite a massive stimulus spending plan of 787 billion dollars by President Barack Obama's administration.

"The global energy market is lost in the fog as the economic outlook seems to be getting a bit murkier," said Phil Flynn of Alaron Research.

Data released last week by the Department of Energy showed a bigger-than- expected rise in gasoline reserves, indicating that Americans were cutting back at a time when they should be travelling for summer holidays.

"The bigger picture is that final demand is set to remain weak for years," analysts from London-based Capital Economics said in a report.

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