Oil hovers above $69 amid mixed crude demand signs
SINGAPORE — Oil prices hovered just above $69 a barrel Thursday in Asia amid mixed signals about crude demand from a weekly U.S. inventory report.
Benchmark crude for August delivery rose 38 cents to $69.05 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Wednesday, it lost 57 cents to settle at $68.67.
Crude prices have fallen from an eight-month high near $73 earlier this month on investor doubts that demand in a weak U.S. economy may not justify the stock and commodity rally since March.
The Energy Department’s Energy Information Administration reported Wednesday that U.S. oil supplies dropped more than expected last week, falling 3.8 million barrels, or 1.1 percent. However, gasoline in storage swelled 3.9 million barrels, which was more than expected, to 208.9 million barrels.
The U.S. central bank also struck a cautious tone in comments Wednesday.
The Federal Reserve said the economy doesn’t appear to be sliding as quickly as it had been and consumer spending has shown signs of stabilizing. However, job losses, shrinking wealth and tight credit will likely keep economic activity weak for some time.
“Recovery in the U.S. is likely to be a gradual process,” said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. “So while there’s some optimism that the worst is probably past, the upturn will possibly be slower than has been factored into the oil market.”
Moore said he expected the oil price to fall to about $60 a barrel over the next few months.
Investors’ sentiment was bolstered by an unexpected rise in durable goods orders in May. Orders for big-ticket manufactured items rose 1.8 percent last month, the Commerce Department said Wednesday.
In other Nymex trading, gasoline for July delivery rose 0.75 cent to $1.85 a gallon and heating oil gained 0.73 cent to $1.75. Natural gas for July delivery climbed to $3.77 per 1,000 cubic feet.
In London, Brent prices rose 44 cents to $68.78 a barrel on the ICE Futures exchange.
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