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Oil hovers below $104 after mixed US supply report

Oil hovers below $104 after mixed US supply report

May 11th, 2011 by ALEX KENNEDY, Associated Press in News

SINGAPORE (AP) - Oil prices hovered below $104 a barrel Wednesday in Asia as traders mulled mixed signs about the strength of U.S. crude demand.

Benchmark crude for June delivery was up 10 cents to $103.98 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to settle, or 1.3 percent, at $103.88 on Tuesday.

In London, Brent crude for June delivery was up 7 cents to $117.70 a barrel on the ICE Futures exchange.

The American Petroleum Institute said late Tuesday that crude inventories rose 2.9 million barrels last week, more than the increase of 1.6 million barrels predicted by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.

However, inventories of gasoline, which have dropped 11 straight weeks, fell by 295,000 barrels last week, the API said.

The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.

Oil prices have swung sharply since the beginning of May, dropping 15 percent last week before rebounding about 6 percent so far this week. Investor concern that flooding on the Mississippi River could damage refineries and disrupt fuel shipments helped push crude higher Tuesday.

The flooding is the latest in a series of events that have rocked oil markets this year, including political uprisings throughout North Africa and the Middle East and the violent conflict in Libya.

"It has been a rare and strange year since the first ripple of discontent in Tunisia," Cameron Hanover said in a report. "And events that have happened since have only magnified the volatility of a nervous and jittery market."

In other Nymex trading in June contracts, heating oil added 1.1 cents to $3.03 a gallon and gasoline fell 3.0 cents to $3.35 a gallon. Natural gas futures were up 1.6 cents at $4.26 per 1,000 cubic feet.