Oil slides below $76 in Asia as investors look to US supply figures for clues on demand

Oil slides below $76 as traders eye US supplies

Oil prices slid below $76 a barrel Tuesday as traders awaited the latest U.S. supply figures for clues about the strength of demand for crude.

By early afternoon in Europe, benchmark crude for November delivery was down 67 cents to $75.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 3 cents to settle at $76.52 on Monday.

Crude inventories likely rose 2.2 million barrels last week, according to analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. The American Petroleum Institute plans to announce its inventory numbers later Tuesday while the Energy Department’s Energy Information Administration reports its weekly supply data — the market benchmark — Wednesday.

Oil prices have snaked around the $75 a barrel level for most of the last year as U.S. crude demand remains sluggish amid an uneven economic recovery. Brimming crude storage levels are also weighing on prices.

“The existing fundamentals could kick prices down to half or less of what they are right now,” Cameron Hanover said in a report. “Many traders opt to keep their powder dry until more definitive signals are presented” about the economic outlook, it said.

Investors will be closely watching the latest U.S. indicators due this week including gross domestic product, car sales and industrial production.

“With prices still stuck in tight trading ranges, there is little indication that they will break out one way or another, at least for the time being,” said Edward Meir at MF Global in New York. “We still suspect the eventual break will be to the downside once the hurricane season is over.”

Oil production can be affected when oil rigs and refineries are in the path of hurricanes in the Gulf of Mexico.

In other Nymex trading in October contracts, heating oil fell 1.51 cents to $2.1077 a gallon and gasoline dropped 0.70 cent to $1.9418 a gallon. Natural gas gained 3.0 cents to 3.830 per 1,000 cubic feet.

In London, Brent crude fell 52 cents to $78.05 a barrel on the ICE Futures exchange.

Associated Press writer Alex Kennedy in Singapore contributed to this report.