LONDON (AFP) - World oil prices rallied on Wednesday, with sentiment lifted by rebounding global stock markets as traders awaited the latest weekly snapshot of US energy inventories. New Yorks main contract, light sweet crude for delivery in July, jumped 1.82 dollars to 70.57 dollars a barrel. Londons Brent North Sea crude for July gained 1.57 dollars to 71.12 dollars. Oil plunged Tuesday on fears that the eurozone financial crisis could turn toxic for the global economic recovery. However, prices bounced on Wednesday as dealers were heartened by strong performances on world stock markets. Oil is taking its cue from equities, said Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore. Global stock markets staged a recovery on Wednesday as many investors went bargain hunting after huge recent falls. In midday European trade, Frankfurt jumped 1.82 percent and London 1.86 percent, Madrid rose 1.96 percent and Paris soared 2.60 percent in value. In Asia, Tokyo rallied 0.66 percent, Sydney picked up 0.98 percent and Shanghai added 0.31 percent while Hong Kong closed 1.11 percent higher. The fear factor that drove markets plunging (Tuesday) ... has subsided, therefore we are seeing equities and oil prices heading up ... Enough investors felt it was oversold, Shum said. Rising tensions on the Korean peninsula and fears that the European debt crisis could torpedo economic recovery also sent stocks plummeting on Tuesday. Shum warned, however, that oil prices could remain volatile until the underlying issues are resolved. Later Wednesday, the US governments Department of Energy will publish its key report on American energy reserves for the week ending May 21. Today the market is likely to briefly turn its attention to fundamentals of supply and demand, said VTB Capital analyst Andrey Kryuchenkov. The report is a key weekly event for traders because the United States is the worlds biggest energy consumer, followed by number two China. Kuwaits oil minister said on Wednesday that market sentiment and not fundamentals were driving oil price volatility. Market sentiment, not fundamentals, Sheikh Ahmad Abdullah al-Sabah told reporters when asked what is behind recent volatility. Look at what happened to the euro and the strength of the dollar, of course. Oil prices have fluctuated sharply, dropping to well below 70 dollars on Tuesday, a few weeks after hitting almost 90 dollars. The eurozone debt crisis and its impact on the euro and the dollar has been partly blamed for the swings. In London deals on Wednesday, the European single currency stood at 1.2321 dollars, one day after it sank as low as 1.2178 dollars. That was not far from the four-year low of 1.2144 dollars that was struck last week on heightened eurozone crisis fears. A stronger dollar makes dollar-priced oil more expensive for buyers using weakening currencies, curbing demand.