Oil slips for 2nd day, falls below $79

[October 21, 2009]  SINGAPORE (AP) -- Oil prices fell for a second day Wednesday in Asia as investors eyed a bigger-than-expected U.S. crude inventory increase and weak economic data.

Benchmark crude for December delivery fell 29 cents to $78.83 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract slid 84 cents to settle at $79.12 on Tuesday.

The November contract expired Tuesday, ending down 52 cents at $79.09.

Crude surmounted $80 a barrel early on Tuesday, capping a two-week rally, before sliding on investor concern sluggish U.S. crude demand may not justify further gains.

U.S. oil inventories rose last week, the American Petroleum Institute said late Tuesday. Crude stocks increased 3.8 million barrels while analysts had expected a rise of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Information Administration is scheduled to release its supply data later Wednesday.

Crude traders are also looking at signs of a possible uneven economic recovery in the U.S. The Commerce Department said Tuesday that applications for home building permits fell in September by the largest amount in five months.

The U.S. dollar, which helped fuel gains in commodities by weakening over the last month, has steadied this week.

In other Nymex trading, heating oil was steady to $2.04 a gallon. Gasoline for November delivery fell 0.70 cents to $1.98 a gallon. Natural gas for November delivery jumped 5.0 cents to $5.21 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 18 cents to $77.06 on the ICE Futures exchange.

[Associated Press; By ALEX KENNEDY]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.