Oil prices hover near $73 in Asia

BANGKOK — Oil prices rose moderately Friday in Asia, hovering near $73 as investors nurtured doubts about a sustainable recovery in the world’s biggest economy.

Benchmark crude for October delivery was up 32 cents to $72.81 a barrel by late morning Bangkok time in electronic trading on the New York Mercantile Exchange. The contract Thursday added $1.06 to settle at $72.49 after tumbling from near $75 earlier in the week.

Reflecting the dire state of energy demand, natural gas prices slumped to their lowest level in seven years Thursday after the U.S. government reported that salt caverns, aquifers and other underground areas where it is stored are filling up. Levels of natural gas have been building because power-intense industries like manufacturing have cut back severely on production.

Crude posted gains because of a fall in the dollar which means investors can get more crude for less money.

Yet some analysts say the oil price is bound to fall in coming weeks as earlier euphoria about the global economy emerging from recession gives way to doubts about how sustainable the recovery is.

Existing weakness in demand will also be exacerbated by the seasonal drop in gasoline consumption when the U.S. summer driving season ends in a few weeks time.

“We have seen this strength (in the oil price) which reflected renewed confidence in the economy,” said John Vautrain, energy analyst at consultancy Purvin & Gertz in Singapore. “But in the last week or so people are starting to say that the stock market is overbought and the data is not that good.”

In other Nymex trading, gasoline for September delivery was up 0.46 cent at $2.036 a gallon and heating oil rose 0.2 cent to $1.8612 a gallon.

In London, Brent crude was up 17 cents at $72.50.