Oil hovers above $81 after surging to 3-month high

[August 03, 2010]  SINGAPORE (AP) -- Oil prices hovered above $81 a barrel Tuesday in Asia after surging stock markets and a weaker dollar helped boost crude to nearly a three-month high.

Benchmark crude for September delivery was up 5 cents to $81.39 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.39, or 3 percent, to settle at $81.34 on Monday, the highest since May 4.

The Dow Jones industrial average rose 2 percent Monday on better than expected manufacturing results in the U.S. and Europe. Asian stock markets were mostly higher Tuesday, a key signal oil traders watch as a gauge of overall investor sentiment.

A weaker dollar also helped boost crude since that makes commodities cheaper for investors with other currencies. The euro rose to $1.3214 on Tuesday from $1.3176 on Monday and the dollar eased to 86.03 yen from 86.46 yen.

Investors will be closely watching weekly U.S. crude inventory data later Tuesday and Wednesday and July employment figures Friday.

"The more important price driver will be forthcoming at week's end in the form of the monthly employment report," Ritterbusch and Associates said in a report.

In other Nymex trading in September contracts, heating oil rose 0.78 cent to $2.1616 a gallon, gasoline was steady at $2.1693 a gallon and natural gas jumped 2.7 cents to 4.728 per 1,000 cubic feet.

Brent crude was up 4 cents to $80.86 a barrel on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

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