Oil Regains Footing

Updated from 11:24 a.m. EST

Energy futures followed equity prices higher Tuesday at the New York Mercantile Exchange.

The April contract for light sweet crude oil closed the session 62 cents higher at $60.69 per barrel. Heating oil was up 3 cents at $1.75 a gallon. Gasoline climbed a penny to $1.85 a gallon.

The near-term contract for natural gas ended the day 22 cents higher at $7.47 per million British thermal units.

Traders say that equity markets have been signaling that the global economy could be heading for a slowdown. Commodities are moving in the same direction as equities because the demand for commodities is largely determined by the pace of economic growth.

Equities in Asia, Europe and the U.S. fell sharply on Monday, and commodities followed suit, falling in Monday's trading session at the Nymex. Stocks recovered in global equity markets Tuesday and commodities moved higher on the news.

According to analysts, it will take a decrease in volatility in stock markets for commodities to become decoupled from equities and to once again move on their own accord. Once that happens, energy prices will likely be affected by whichever news or rumor crosses the tickertape first.

Edward Meir, energy analyst at Man Financial, wrote in a report:

We think the price bias should be lower from here, even if one were to strip away the recent bearish impact of the equity markets. Colder weather is receding as a factor ... OPEC seems to be signaling that it is standing pat in advance of its March 15 meeting, inventories are still comfortable despite the latest draws, and U.S. economic growth prospects are more uncertain at this stage in the growth cycle.

Alternatively, geopolitical turmoil could easily launch energy prices higher. Two U.S. aircraft carrier groups are currently perched in the Middle East while the United Nations is negotiating with Iran to halt its nuclear enrichment program. Rebel groups are stepping up their guerilla activity in Nigeria's oil-rich delta region. An increase in violence in either region could cause a breakdown in crude supplies.