Oil hovers above $79 ahead of US supply report

[November 12, 2009]  SINGAPORE (AP) -- Oil prices hovered above $79 a barrel Thursday in Asia as investors eyed signs that U.S. crude demand remains weak.

Benchmark crude for December delivery was up 11 cents to $79.39 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 23 cents to settle at $79.28 on Wednesday.

Oil has bounced between $76 and $81 for about a month as high U.S. crude inventory levels fuel investor doubts about a recovery in consumer demand.

The American Petroleum Institute said Tuesday that crude supplies rose last week, and traders will be closely watching to the Energy Information Administration's inventory report later Thursday.

"Crude is encountering a lot of resistance at the $80 level because of the supply overhang and no clear signs of demand growth coming back in the U.S.," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

"People talk about a jobless economic recovery. This has been a demand-less oil rally."

Oil has risen from $32 a barrel in December amid a surge in global stocks and a falling U.S. dollar. The Dow Jones industrial index rose 0.4 percent Wednesday and Asian stock indexes were mixed Thursday.

In other Nymex trading, heating oil was steady at $2.06 a gallon. Gasoline for December delivery rose 0.73 cent to $2.00 a gallon. Natural gas for December delivery fell 1.2 cents to $4.49 per 1,000 cubic feet.

In London, Brent crude for December delivery rose 16 cents to $78.11 on the ICE Futures exchange.

[Associated Press; By ALEX KENNEDY]

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