Oil hovers below $80 on mixed US supplies report

SINGAPORE: Oil prices hovered below $80 a barrel Wednesday in Asia after a crude inventory report gave mixed signs about U.S. demand.

Benchmark crude for April delivery was up 3 cents to $79.71 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 98 cents to settle at $79.68 on Tuesday.

U.S. crude inventories grew more than expected last week, the American Petroleum Institute said late Tuesday. Crude stocks jumped 2.7 million barrels while analysts had expected a rise of 1.1 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

However, distillate supplies, which include heating oil and diesel, dropped 4.1 million barrels while gasoline inventories rose by 900,000 barrels.

The Energy Information Administration plans to announce its inventory report later Wednesday.

``Macroeconomic concerns have kept prices below $80 as recent economic data have been mixed,'' Goldman Sachs said in a report.

Standard and Poor's expects crude prices to average $75 a barrel this year.

``Without a stronger U.S. economic pickup, it is unlikely that the developed market is going to see demand growth for crude oil,'' S&P analyst Lorraine Tan said.

In other Nymex trading in April contracts, heating oil rose 0.1 cent to $2.057 a gallon while gasoline fell 0.1 cent to $2.195 a gallon. Natural gas rose 2.9 cents to $4.737 per 1,000 cubic feet.

In London, Brent crude was down 12 cents at $78.06 on the ICE futures exchange.