Oil prices were steady at above $71 today after pausing from losses of over 9 per cent since a record high last week.
US crude fell 5 cents to $71.54 a barrel by earlier this morning after ending 56 cents lower yesterday. London Brent crude rose 11 cents to $70.32, following a 78-cent decline.
Mounting defaults in the US subprime mortgage sector saw Asian stocks slump across the board yesterday as investors dumped riskier assets following news that France's biggest listed bank BNP Paribas froze $2.2 billion of funds.
US crude prices have plunged from a record $78.77 struck on August 1st but have received some support from strength in fuel markets. Heating oil and natural gas prices both climbed yesterday, after government data showed gas inventories rose by a less-than-expected 42 billion cubic feet.
Heating oil inventories in the world's top consumer are 36 per cent below last year.
Analysts said oil prices would also find support from Opec's reluctance to increase output at its September meeting, fuelling concerns of a supply squeeze in the fourth quarter ahead of peak winter fuel demand.