NEW YORK: Oil prices rebounded strongly Tuesday in line with firmer stock markets and a weaker dollar.

New York's main futures contract, light sweet crude for delivery in September, gained 2.44 dollars to 69.19 dollars a barrel. London's Brent North Sea crude for October delivery rallied 1.83 dollars to settle at 72.37 dollars.

The jump came after two consecutive bearish sessions that saw prices drop nearly four dollars amid market concerns about the pace of recovery from prolonged recession in the United States, the world's largest energy consumer.

Rising equity markets across the globe on the back of a weaker dollar Tuesday were "giving some confidence to the oil market," said analyst Phil Flynn at PFG Best Research. "We are just taking our cue from the stock market."

The equity market rally also stemmed from a jump in German investor confidence in August, according to a ZEW survey, less than a week after data showed Europe's biggest economy emerging from recession sooner than expected.

The dollar wilted against the euro Tuesday after strong gains a day earlier when investors again sought safety in the US currency amid doubts over recovery prospects.

Oil is priced in the US currency and becomes more expensive when the dollar rises. Mike Fitzpatrick of MF Global cautioned about the volatility in oil prices and persistent concerns about sagging US consumer sentiment.

"Monday's test of 65 dollars for crude oil after having posted a high of over 72 dollars just last Thursday is a product of a realization that consumers ... are either unable or unwilling to return to their free-spending ways," he said.

Consumer spending accounts for about two-thirds of US economic output.

Fitzpatrick cited fresh data Tuesday showing US wholesale prices falling more than expected in July following a 1.8 percent climb as well as a decline in home construction in July, saying it "does not paint a picture of robust economic growth."LINK