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Oil hovers below $103 amid signs of weak U.S. demand

Benchmark oil for May delivery was up 28 cents to $102.95 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract fell $1.53 to settle at $102.67 in New York on Wednesday.

The Associated Press

4/19/2012

LONDON — Oil prices hovered below $103 a barrel Thursday, after dropping sharply the previous day, when figures showed U.S. crude supplies rose more than expected for a fourth week, a sign demand remains tepid.

Benchmark oil for May delivery was up 28 cents to $102.95 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract fell $1.53 to settle at $102.67 in New York on Wednesday.

Brent crude for June delivery was up 76 cents to $118.73 per barrel in London.

The Energy Information Administration said Wednesday that U.S. crude oil supplies grew by 3.9 million barrels last week. Analysts expected an increase of 400,000 barrels. The government's weekly report also said that U.S. gasoline demand fell 2.8 percent compared with a year ago.

Crude has traded above $100 a barrel for most of this year, sending gasoline prices to near $4 a gallon (about $1 a liter) in the U.S. If fuel costs rise much more, they could threaten consumer spending and fragile U.S. economic growth, said Fitch Ratings.

"The price of gasoline is a major determinant of U.S. consumer discretionary income and consumer spending is estimated to drive 70 percent of the U.S. economy," Fitch said in a report. "A short-term disruption in oil prices could therefore materially disrupt a U.S. economic recovery."

In other energy trading, heating oil was up 1.7 cents at $3.13 per gallon and gasoline futures gained 1.4 cents at $3.22 per gallon. Natural gas was steady at $1.95 per 1,000 cubic feet.

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