Oil hovers near $79 as stocks extend rally

[July 26, 2010]  SINGAPORE (AP) -- Oil prices hovered near $79 a barrel Monday in Asia as regional stock markets extended a rally from last week amid improving investor optimism.

Benchmark crude for September delivery was down 20 cents at $78.76 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 32 cents to settle at $78.98 on Friday.

Most Asian stock markets rose Monday, taking heart from a 3-percent rally in the Dow Jones industrial average over the final two trading sessions of last week. Oil traders often look to equities as a guidepost of overall investor sentiment.

The Dow rose to a one-month high Friday after most companies reported impressive results during the first two weeks of second-quarter corporate earnings season. Investors will be eyeing results this week from insurer Aetna, drug company Merck and Southwest Airlines along with data on housing, employment and consumer demand.

Bonnie, which was a tropical storm Friday, petered out when it reached the Gulf of Mexico and didn't damage any of the region's oil installations. However, the threat of Bonnie caused companies to evacuate offshore rig workers and temporarily shut down some crude production.

In other Nymex trading in August contracts, heating oil fell 0.13 cent to $2.0492 a gallon, gasoline dropped 0.67 cent to $2.1155 a gallon and natural gas slid 2.0 cents to $4.560 per 1,000 cubic feet.

Brent crude was down 42 cents to $77.03 a barrel on the ICE futures exchange.

[Associated Press; By ALEX KENNEDY]

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