TH:Oil falls to near $97 as U.S. crude supplies jump
Oil prices fell to near $97 a barrel Wednesday in Asia after a report showed U.S. crude supplies unexpectedly rose last week, suggesting demand is weak.
Benchmark oil for August delivery was down 31 cents to $97.12 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude gained $2.28 to settle at $97.43 on Tuesday.
In London, Brent crude fell 22 cents to $117.53 per barrel on the ICE Futures exchange.
The American Petroleum Institute said late Tuesday that crude inventories rose 2.3 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 2.1 million barrels.
Inventories of gasoline dropped 1.6 million barrels last week while distillates increased 4.8 million barrels, the API said.
“The only bullish number out of yesterday’s report seems to be gasoline inventories,” energy consultant The Schork Group said in a report. “All told, the API report strikes us as bearish.”
The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.
Robust economic growth in China helped limit the fall in oil prices. China, the world’s second largest crude consumer, said Wednesday that its economy grew 9.5 percent in the second quarter, down slightly from 9.7 percent growth in the first quarter.
Investors are also closely watching Europe’s attempts to contain its debt crisis. On Tuesday, Moody’s Investors Service downgraded its ratings on Irish government bond to junk.
European leaders haven’t agreed yet on the nature of a new bailout agreement for Greece and how private holders of the country’s bonds could contribute to easing the payout schedule.
In other Nymex trading in August contracts, heating oil fell 1.8 cents to $3.07 a gallon while gasoline dropped 0.6 cent at $3.09 a gallon. Natural gas futures slid 1.3 cents at $4.32 per 1,000 cubic feet.
