* Oil prices snap 3-day losing streak,
* U.S. dollar index rises amid fears of global slowdown
* Coming up: U.S. April existing home sales, 1400 GMT
By Fayen Wong
PERTH, May 24 (Reuters) - Oil prices snapped three straight
sessions of decline and rose slightly to hover above $70 a
barrel on Monday, but analysts said sentiment remain fragile
and prices could be again be hit by macroeconomic pessimism.
U.S. crude for July delivery <CLc1> rose 27 cents to $70.31
a barrel by 0238 GMT. London Brent crude <LCOc1> fell 47 cents
to $71.21.
"Oil market sentiment remains weak and market confidence is
still being rattled by the uncertain economic outlook," said
David Moore, a commodities analyst at the Commonwealth Bank of
Australia.
"Oil market inventories also remain high, so I suspect we
will continue to see that pattern of sharp volatility for
awhile."
Since striking a 2010 high just above $87 a barrel on May
4, crude prices have fallen in eleven of the last fifteen
trading days and touched a low of $64.24 on Thursday last week,
its weakest since September last year.
Germany's parliament approved on Friday its portion of a $1
trillion safety net to stabilise the euro as fears swirled that
Europe's debt crisis and tougher financial regulation may choke
economic recovery. []
However, worries persist that Greece's debt troubles could
spread to other indebted nations, dragging down Europe's
economy and curtailing trade to the United States and Asia.
Calls for other European economies to cut spending and
slash their budget deficits have also sparked worries that the
region's economy would slow, curtailing energy demand.
Although oil prices will no doubt remain at the mercy of
broader macroeconomic pessimism, analysts at Barclays Capital
said recovering demand in the U.S. and other non-industrialised
economies, such as China, the Middle East and India, would lift
prices.
"With oil fundamentals improving fast, we expect prices to
pick up once the phase of severe risk reduction abates,"
Barclays capital oil analyst Amrita Sen said in a report.
In the short-to-medium term, other potentially supportive
factors include the start of the U.S. summer driving season and
the start of the hurricane season in the U.S., which lasts from
June through November.
Some meteorologists have predicted an unusually destructive
hurricane season which could cause offshore oil production in
the Gulf of Mexico to shut for extended periods.
[]
The U.S. dollar index <.DXY> rose 0.42 percent against a
basket of currencies on Monday, while Asian stocks remained on
the backfoot on weak demand for risky assets and currencies.
Volatility will be the name of the game on Wall Street this
week as uncertainty over the euro-zone debt crisis remains a
potent factor. []
On the geopolitical front, Iran said it would abandon an
offer to ship some of its uranium stockpile abroad if the
United States imposes new sanctions, adding that Washington's
continued determination to impose sanctions could even lead
Tehran to review its cooperation with the U.N. nuclear agency.
[]
(Editing by Ed Lane)
