SIGNAPORE -- Oil prices hovered above $99 a barrel Wednesday in Asia after a report showed U.S. crude inventories fell more than expected, suggesting demand may be improving. Benchmark oil for July delivery was down 26 cents to $99.11 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $2.07 to settle at $99.37 on Tuesday. In London, Brent crude for July delivery was up 65 cents to $120.81 a barrel on the ICE Futures exchange. The American Petroleum ( AMPE.OB - news - people ) Institute said late Tuesday that crude inventories fell 3.0 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill ( MHP - news - people ) Cos., had predicted a drop of 1.9 million barrels. Inventories of gasoline rose 1.1 million barrels last week while distillates fell 426,000 barrels, the API said. The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.

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