Oil hovers above $88 amid mixed global equities

[September 13, 2011]  SINGAPORE (AP) -- Oil prices hovered above $88 a barrel Tuesday in Asia as global stock markets were mixed amid worries about Europe's debt crisis.

Benchmark oil for October delivery was down 1 cent to $88.18 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose 95 cents to settle at $88.19 on Monday.

In London, Brent crude for October delivery was up 19 cents at $112.44 on the ICE Futures exchange.

A late surge pushed the Dow Jones industrial average up 0.6 percent Monday and most Asian stock markets gained Tuesday. However, markets in Europe opened lower Tuesday. Oil traders often look to equities as a barometer of overall investor sentiment.

A recent pledge by the U.S. Federal Reserve to keep lending rates low for the next two years has also helped bolster commodity prices.

"Crude still appear to be supported by oil's long-term appeal as an asset class amid additional stimulus efforts that include a sustainable low interest rate environment beyond next year," Ritterbusch and Associates said in a report.

Crude has traded between $80 and $90 during the last month amid growing investor concern that Greece may default on its debt. Traders are worried a Greek default could trigger similar moves in Portugal, Ireland, Spain and Italy and spread into a global financial crisis.

A slowing global economy also weighed on oil prices. The Organization of Petroleum Exporting Countries said Monday it cut its 2011 forecast for world oil demand because it expects slumping global economic growth to undermine consumer demand.

In other Nymex trading for October contracts, heating oil fell 0.6 cents at $2.94 per gallon and gasoline futures were steady at $2.74 per gallon. Natural gas for October delivery slid 1.3 cents to $3.87 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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