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Published: Wednesday November 4, 2009 MYT 7:40:00 AM
Updated: Wednesday November 4, 2009 MYT 2:33:09 PM

Oil prices fall in Asia Wednesday to near US$79(update)


SINGAPORE: Oil prices fell slightly to near US$79 a barrel Wednesday in Asia despite an unexpected drop in U.S. crude supplies which suggested demand may be picking up.

Benchmark crude for December delivery was down 20 cents to $79.40 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract gained $1.47 to settle at $79.60 on Tuesday.

U.S. oil inventories dropped last week, the American Petroleum Institute said late Tuesday. Crude stocks fell 3.3 million barrels while analysts had expected a rise of 1.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Information Administration is scheduled to release its supply data later on Wednesday.

Crude has fallen from its 2009 high of $82 a barrel last month on investor doubts about the strength of the U.S. economy.

Some analysts say the oil price could fall further if a monthly U.S. unemployment report on Friday confirms the number of jobless continues to swell.

"We still feel that a decline toward the $75 area could be forthcoming as this week proceeds," Galena, Illinois-based Ritterbusch and Associates said in a report.

In other Nymex trading, heating oil fell 1.21 cents to $2.06 a gallon.

Gasoline for December delivery dropped 0.99 cent to $1.99 a gallon

Natural gas for December delivery was steady at $4.92 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 24 cents to $77.87 on the ICE Futures exchange. - AP

Earlier report

Oil prices rise as US Fed meets on interest rates

NEW YORK: Oil prices rose Tuesday as the Federal Reserve began a two-day policy meeting on interest rates.

Benchmark crude for December delivery gained $1.47 to settle at $79.60 a barrel Tuesday on the New York Mercantile Exchange.

The U.S. government stepped in to bail out faltering banks and other giant businesses over the past year, which has helped send the dollar tumbling and the price of oil sharply higher.

Since oil is largely bought and sold in dollars, investors holding stronger currencies can buy more crude for less and have done so in recent months, sending the price of benchmark crude above $80 near the end of October.

The central bank isn't expected to take any action on interest rates, yet statements issued after such meetings can hint at the Fed's take on the state of the economy.

"Oil is still being controlled by larger macroeconomic forces and not just demand and demand expectations," said PFGBest analyst Phil Flynn.

"The main concern is still all about what the Federal Reserve might do."

Crude has been plentiful because the global economic slowdown has crimped demand, particularly in the United States.

Most analysts believe crude supplies in the U.S. grew again last week, and the Energy Department on Wednesday will release its weekly supply and demand figures for oil and gasoline.

In other Nymex trading, heating oil rose 2.73 cents to settle at $2.0733 a gallon.

Gasoline for December delivery gained 1.32 cents to $2.0035 a gallon.

Natural gas for December delivery gained 9.8 cents to settle at $4.922 per 1,000 cubic feet.

In London, Brent crude for December delivery added $1.56 to settle at $78.11 on the ICE Futures exchange. - AP


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