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SINGAPORE – Oil prices hovered below $79 a barrel Wednesday in Asia after a report showed U.S. crude inventories unexpectedly fell last week, suggesting demand may be improving.
Benchmark crude for April delivery was up 6 cents to $78.92 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $1.45 to settle at $78.86 on Tuesday.
Oil has bounced between $70 a barrel and $80 for most of the last six months as investors wait for signs that U.S. crude demand is catching up with an overall economic recovery.
Crude inventories fell 3.1 million barrels last week, the American Petroleum Institute said late Tuesday. Analysts had expected an increase of 2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Supplies of distillates, which include heating oil and diesel fuel, also fell while gasoline supplies grew, the API said.
The Energy Department's Energy Information Administration is scheduled to announce its supply report later Wednesday.
In other Nymex trading in March contracts, heating oil gained 0.64 cent to $2.0389 a gallon, and gasoline rose 0.23 cent to $2.0679 a gallon. Natural gas was steady at $4.779 per 1,000 cubic feet.
In London, Brent crude was up 4 cents at $77.29 on the ICE futures exchange.
