Crude oil gains some ground, pushing back near $72 a barrel; pump prices trimmed again

By Sandy Shore, AP
Wednesday, August 25, 2010

Oil rises after 6 days of declines

Oil prices edged higher Wednesday afternoon, struggling back from earlier lows following reports of weak orders for big-ticket durable goods and falling new home sales.

Benchmark crude for October delivery rose 35 cents to $71.98 a barrel on the New York Mercantile Exchange. Crude has fallen from around $82 a barrel early this month.

At the pump, the national average for a gallon of unleaded regular gasoline slid to $2.696 a gallon, according to AAA, Wright Express and Oil Price Information Service. That’s 4.1 cents lower than a week ago and 7.3 cents more than a year ago.

The Commerce Department said orders for durable goods, excluding transportation, fell at their steepest rate since January.

The department also said new home sales fell 12.4 percent in July from June to seasonally adjusted annual sales of 276,600. That’s the slowest pace recorded since 1963.

The sluggish economy is holding down demand for oil and gas. Crude and motor gasoline inventories both rose last week, staying at the upper levels of the average range for this time of year.

Commercial crude supplies increased by 4.1 million barrels, or 1.2 percent, to 358.3 million barrels for the week ended Aug. 20, the Energy Department said.

Gasoline inventories grew by 2.3 million barrels to 225.6 million barrels, which is 8.4 percent above year-ago levels. Wholesale gasoline demand for the four weeks that ended Aug. 20 averaged about 9.4 million barrels a day, down about 84,000 barrels from the previous week, the government said.

“Oil prices have shifted their focus to whether the global economy is likely to take another lurch down and, if so, what shape that movement away from the recovery would be, with the fears of a slowdown having spread like wildfire,” Barclays Capital said in a research report.

In other Nymex trading, heating oil rose 2.38 cents to $1.9603 a gallon, gasoline gained 0.5 cent at $1.8544 a gallon and natural gas lost 16.5 cents at $3.874 per 1,000 cubic feet.

In London, Brent crude was up 59 cents at $72.97 a barrel on the ICE Futures exchange.

Associated Press writers Pablo Gorondi in Hungary and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.

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