Oil prices rebounded on Thursday as stock markets rallied on economic recovery hopes after US aluminium giant Alcoa's surprisingly swung into profit, traders said.

New York's main contract, light sweet crude for delivery in November climbed 93 cents to 70.50 dollars a barrel.

In London, Brent North Sea crude for November gained 98 cents to 68.18 dollars.

Alcoa's report is "very positive and this really marks a strong start for the third quarter corporate earnings season," said Victor Shum of energy consultancy Purvin and Gertz.

"This sparked the stock markets... to turn up and oil has gained along with them," he added.

Alcoa announced in the United States late on Wednesday that it had swung into profit during the third quarter after three quarters running of losses.

The company said its net income was 77 million dollars or eight cents a share in the quarter ended September, compared with a net loss for the second quarter of 454 million dollars or 47 cents per share.

Alcoa was the first company in the blue chip Dow Jones Industrial Average index to announce results for the three months through September 30. It had been expected to report a loss excluding special items of nine cents a share.

European stock markets rallied on the news in morning trade on Thursday.