Oil hovers above $75 in Asia after report shows US supplies unexpectedly rose last week

Oil hovers above $75 after US supplies increase

SINGAPORE — Oil prices hovered above $75 a barrel Wednesday in Asia after a report showed U.S. supplies unexpectedly rose last week, a sign demand for crude may not be improving.

Benchmark crude for November delivery was up 24 cents to $75.21 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.22 to settle at $74.97 on Tuesday. The October contract expired Tuesday, losing $1.34 to settle at $73.52.

The American Petroleum Institute said late Tuesday that crude inventories rose 2.2 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast a drop of 1.5 million barrels. Inventories of gasoline and distillates also rose, the API said.

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

Some traders expect the Energy Department’s data to be closer to the analysts’ forecast. The API data is collected voluntarily from refineries and storage facilities while the government’s report is mandatory.

“This should be a very bearish report, if we bought it,” energy consultancy and trader The Schork Report said. “As it stands, huge discrepancies often exist between the API and DOE report, and we have the feeling this is going to be one of those weeks.”

While crude demand in the U.S. may be sluggish, consumption in emerging economies has been robust this year. Chinese oil consumption grew 7.6 percent in August from a year earlier, Platts said.

“Despite the cautious outlook on oil demand still often expressed in market sentiment, the actual flow of data continues to point to extremely robust global demand indications,” Barclays Capital said in a report.

In other Nymex trading in October contracts, heating oil fell 0.65 cent to $2.113 a gallon and gasoline slid 0.51 cent to $1.914 a gallon. Natural gas rose 2.7 cents to $3.946 per 1,000 cubic feet.

In London, Brent crude rose 4 cents to $78.46 a barrel on the ICE Futures exchange.