Oil hovers below $98 amid mixed US demand signs

[February 02, 2012]  SINGAPORE (AP) -- Oil prices hovered below $98 a barrel Thursday in Asia amid mixed signs about the strength of U.S. crude demand.

Benchmark crude for March delivery was up 1 cent at $97.62 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to settle at $97.61 on Wednesday.

Brent crude rose 30 cents to $111.86 a barrel on the ICE Futures Exchange in London.

A jump of U.S. crude inventories last week by 4 million barrels suggested oil consumption is sluggish. However, factories raised output in January by the most in seven months, the Institute for Supply Management said Wednesday while the Commerce Department said construction spending rose 1.5 percent in December, the fifth straight monthly gain.

Oil prices have hovered near $100 for the last few months amid mixed economic signs from the U.S., Europe and Asia. Some analysts expect crude to begin to rise as the global economy may grow more this year than previously expected.

"The crude oil price has become stuck in a remarkably extended period of narrow sideways trading," Barclays Capital said in a report. "However, the market is now likely to start to position for an upside break based on a greater degree of relaxation about macroeconomic prospects."

In other energy trading, heating oil rose 1.8 cents to $3.06 per gallon and gasoline futures were steady at $2.89 per gallon. Natural gas gained 1.3 cents to $2.40 per 1,000 cubic feet.

[Associated Press; By ALEX KENNEDY]

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