Oil lingers near $65 as US crude supplies rise
SINGAPORE: Oil prices lingered near $65 a barrel Wednesday in Asia as rising U.S. crude inventories suggested consumer demand remains sluggish in the world's biggest economy.
Benchmark crude for September delivery was down 53 cents to $65.08 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Tuesday, the August contract expired, rising 74 cents to settle at $64.72.
U.S. crude inventories rose 3.1 million barrels last week while gasoline supplies gained 1.3 million, the American Petroleum Institute said late Tuesday. Analysts expected the API numbers to fall 2.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Investors will be watching for inventory data from the Energy Department's Energy Information Administration on Wednesday for more signs crude demand may be waning.
The API numbers are reported by refiners voluntarily while the EIA figures are mandatory.
Oil prices have risen from $58.78 a barrel two weeks ago on stronger than expected second quarter corporate earnings. Some of the improved company results have been the result of cost cutting such as layoffs, which in turn is dragging on consumer demand.
Federal Reserve Chairman Ben Bernanke said Tuesday that the economy is still on track to recover this year, but slowly. He also predicted rising unemployment.
"The better profits is a good sign, but I want to see more macro numbers improve," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. "High unemployment is still a problem going forward."
In other Nymex trading, gasoline for August delivery fell 1.95 cents to $1.79 a gallon and heating oil dropped 0.84 cents to $1.69. Natural gas for August delivery slid 2.0 cents to $3.69 per 1,000 cubic feet.
In London, Brent prices fell 41 cents to $66.46 a barrel on the ICE Futures exchange.