Oil rises to near $69 amid mixed US demand signs

SINGAPORE — Oil prices rose toward $69 a barrel Thursday in Asia as mixed U.S. crude inventory data shed little light on demand.

Benchmark crude for October delivery was up 64 cents at $68.69 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract Wednesday settled unchanged at $68.05.

The U.S. Energy Department’s Energy Information Administration on Wednesday said crude inventories fell 372,000 barrels last week, while analysts had expected a drop of 1.9 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

However, gasoline inventories fell by 3 million barrels, a steeper decline than analysts had expected.

“There’s a mix of good news and bad news,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. “That’s why the market will likely trade in a range of $65 to $75 this month.”

Trading volume in Asia was light Thursday ahead of the Labor Day holiday weekend in the U.S., Chu said.

The growth of Chinese crude consumption will likely help push prices higher over the next year, a Morgan Stanley report said.

Chinese oil consumption has risen to 43 percent of U.S. demand, up from 16 percent in 2000, while by 2024, China will likely be the world’s largest oil market, the report said.

Morgan Stanley expects oil to average $85 a barrel in 2010.

In other Nymex trading, gasoline for October delivery rose 0.74 cent to $1.82 a gallon and heating oil gained 0.99 cent to $1.76 a gallon. Natural gas was steady at $2.72 per 1,000 cubic feet.

In London, Brent crude was up 45 cents at $68.11.