Oil hovers above $78 amid mixed crude demand signs

Oil prices have bobbed between $70 and $80 for most of the last six months as investors mull growing crude demand in developing countries such as China offset by flagging consumption in developed countries.

By ALEX KENNEDY
The Associated Press

2/26/2010

SINGAPORE — Oil prices hovered above $78 a barrel Friday in Asia amid mixed signals about global crude demand.

Benchmark crude for April delivery was up 16 cents to $78.33 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.83 to settle at $78.17.

Oil prices have bobbed between $70 and $80 for most of the last six months as investors mull growing crude demand in developing countries such as China offset by flagging consumption in developed countries.

Even a cold winter in the U.S. has failed to boost demand for heating oil.

"The absence of any sustained seasonal draw in heating oil inventories is still striking," Barclays Capital said in a report. "The inventory overhang remains stubbornly high."

"We continue to expect strong demand growth from China in 2010."

Crude prices were bolstered by a weaker U.S. dollar, as dollar-based commodities such as oil become cheaper for investors with other currencies when the dollar falls. The euro rose to $1.3585 on Friday from $1.3547 the previous day.

In other Nymex trading in March contracts, heating oil fell 0.37 cent to $1.9825 a gallon, while gasoline rose 0.87 cent to $2.0457 a gallon. Natural gas prices gained 4.8 cents to $4.815 per 1,000 cubic feet.

In London, Brent crude was up 10 cents at $76.39 on the ICE futures exchange.

Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.

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