Oil hovers near $73 amid mixed US economic data

[August 21, 2009]  VIENNA (AP) -- Oil prices stayed close to $73 a barrel Friday, as traders weighed mixed economic data from the U.S. suggesting a recovery in demand will be slow.

Benchmark crude for October delivery was up 9 cents to $73 a barrel by noon European electronic trading on the New York Mercantile Exchange. On Thursday, the contract fell 92 cents to settle at $72.91.

The September contract, which expired Thursday, advanced 12 cents to end at $72.54.

Investors are digesting news that indicates U.S. consumption remains weak even as the economy recovers from recession.

The "bad headlines ... overshadowed the less-bad headlines," wrote trader and analyst Stephen Schork in his Schork Report, referring to the economic data.

The Labor Department on Thursday said the number of first-time unemployment claims rose unexpectedly for the second straight week. And the Mortgage Bankers Association said more than 13 percent of homeowners with a mortgage are either behind on their payments or in foreclosure.

"There are no real signs that consumption in the U.S. is picking up," said Ben Westmore, energy analyst with National Australia Bank in Melbourne. "Until we see that, investors won't be assured that the recovery is imminent."

Investors were cheered earlier this week when the Energy Information Administration said crude in storage fell by 8.4 million barrels last week, suggesting demand could be improving.

On Thursday, the Philadelphia Federal Reserve said factory activity in the mid-Atlantic region jumped back into positive territory in August, reaching its highest level since November 2007.

Meanwhile, the Conference Board's economic forecasting gauge, the Index of Leading Economic Indicators, rose for the fourth straight month during July.

"The data is quite volatile," Westmore said. "If we see more inventory draws, oil could break through the $75 a barrel mark."

In other Nymex trading, gasoline and heating oil for for September delivery were steady at $1.98 and $1.89 a gallon. Natural gas for September delivery held at $2.95 per 1,000 cubic feet.

In London, Brent prices rose 27 cents to $73.60 a barrel on the ICE Futures exchange.

[Associated Press; By GEORGE JAHN]

Associated Press writer Alex Kennedy contributed to this report from Singapore.

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