SINGAPORE (AP) - Oil prices hovered above $107 a barrel Thursday in Asia as a large drop in U.S. gasoline supplies suggested the two-month crude rally hasn't yet undermined consumer demand.
Benchmark crude for May delivery was down 4 cents at $107.07 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 86 cents to settle at $107.11 on Wednesday.
In London, Brent crude for May delivery was down 2 cents to $122.86 a barrel on the ICE Futures exchange.
Traders are mulling whether global crude demand is strong enough to justify extending a 27 percent surge in prices since mid-February. Oil touched $113.46 in intraday trading Monday, the highest since September 2008.
On Wednesday, the Energy Information Administration reported U.S. gasoline supplies fell by 7 million barrels last week, a bigger drop than the 1.3 million barrels forecast by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
"As gasoline stocks plunged, a major dent was placed in the argument that high prices are beginning to deter demand," Ritterbusch and Associates said in a report.
The EIA also said crude supplies rose by 1.6 million barrels last week to 359.3 million barrels, which is 1.5 percent above year-ago levels.
In other Nymex trading in May contracts, heating oil dropped 0.3 cents to $3.21 a gallon and gasoline rose 0.2 cents to $3.24 a gallon. Natural gas futures were down 0.3 cents at $4.12 per 1,000 cubic feet.