Oil hovers below $107 after US crude supply jump

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Oil hovers below $107 after US crude supply jump

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Benchmark oil for April delivery was down 3 cents to $106.68 at midday Singapore time.

14 March,2012 09:49 am

Oil prices hovered below $107 a barrel Wednesday in Asia after a report showed a jump in U.S. crude supplies, a sign demand remains sluggish.Benchmark oil for April delivery was down 3 cents to $106.68 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 37 cents to settle at $106.71 per barrel in New York on Tuesday.Brent crude was steady at $126.22 per barrel in London.The American Petroleum Institute said late Tuesday that crude inventories rose 2.8 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 2.1 million barrels.Inventories of gasoline fell 2.1 million barrels last week while distillates tumbled 3.5 million barrels, the API said.The Energy Departments Energy Information Administration reports its weekly supply data later Wednesday.Crude has surged from $75 in October as evidence of a strengthening U.S. economy during recent months has eased fears of a recession. The government said Tuesday that retail sales rose 1.1 percent, the biggest jump since September.The worst fears of the last three months of 2011 have not materialized, Singapore central bank managing director Ravi Menon said in a speech Wednesday. The last six weeks in particular have shown signs that the global economy has avoided imminent disaster.However, a sharp spike in oil prices could potentially derail global economic growth, he said.Policymakers and analysts are worried higher fuel costs will undermine consumer spending and quicken inflation.In other energy trading, heating oil was steady at $3.27 per gallon and gasoline futures gained 1 cent at $3.36 per gallon. Natural gas added 0.3 cent at $2.30 per 1,000 cubic feet.