Oil below $97 amid strong emerging market demand
Originally published July 6, 2011 at 1:16 a.m., updated July 6, 2011 at 5 a.m.
SINGAPORE (AP) — Oil prices hovered below $97 a barrel Wednesday in Asia amid investor optimism that strong crude demand from developing countries will offset weaker consumption growth in rich nations.
Benchmark oil for August delivery was down 13 cents to $96.76 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude gained $1.95 to settle at $96.89 on Tuesday.
In London, Brent crude fell 11 cents to $113.50 on the ICE Futures exchange.
Barclays Capital boosted its 2012 forecast for Brent by $10 to $115 per barrel on the expectation that robust economic growth in China, India, Saudi Arabia and Brazil will fuel greater crude demand.
“The quest for industrialization and urbanization has tended to dominate energy and oil usage over the past few years, a trend we expect to remain largely unaltered over the coming years,” Barclays said.
Oil has rebounded from near $90 last week. Traders on Tuesday shrugged off lower equities, a stronger dollar, the end of the Federal Reserve’s bond purchase program and the International Energy Agency’s release of 60 million barrels of oil from strategic reserves.
In other Nymex trading in August contracts, heating oil fell 0.6 cent to $2.95 a gallon while gasoline slid 0.4 cent at $2.97 a gallon. Natural gas futures dropped 3.8 cents at $4.33 per 1,000 cubic feet.