Oil hovers near $82 on mixed US supply data

AP News
Posted: Oct 28, 2010 4:11 AM
Oil hovers near $82 on mixed US supply data

Oil prices hovered near $82 a barrel Thursday in Asia as weekly supply figures gave mixed signs about U.S. crude demand.

Benchmark oil for December delivery was up 14 cents at $82.08 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 61 cents to settle at $81.94 on Wednesday.

The Energy Department said commercial crude inventories rose 5 million barrels _ more than the 1.5 million barrel increase expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos _ but gasoline inventories fell 4.4 million barrels.

Oil has traded close to $82 this week as investors wait for details of a Treasury bond-buying program, known as quantitative easing, that the Federal Reserve has signaled it will likely announce next week to spur economic growth.

The dollar has weakened in anticipation of the Fed measures, helping to keep oil above $80 this month.

"We suspect that the prospect of additional quantitative easing is now largely priced into the currency and the commodity markets," Capital Economics said in a report. "A large part of (oil's) recent strength is due to developments in the financial markets which will prove to be temporary."

Capital Economics said it expects crude to drop to $60 by the end of next year as global oil demand disappoints.

In other Nymex trading in November contracts, heating oil fell 0.12 cent to $2.237 a gallon and gasoline gained 0.37 cent to $2.106 a gallon. Natural gas slid 1.8 cents to $3.781 per 1,000 cubic feet.

In London, Brent crude rose 6 cents to $83.27 a barrel on the ICE Futures exchange.