KUALA LUMPUR, Malaysia – Oil prices hovered above $100 a barrel Friday as signs of economic improvements in the U.S. and Europe “were tempered by a rise in gasoline stocks.”
Crude oil was at $100.67, up 28 cents at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to finish at $100.39 on Thursday.
Receding eurozone debt worries were among the reasons that paved the way for strong demands in France and Spain’s bond auction.Both countries were downgraded on the sovereing debt rating
Worries about Europe’s debt crisis and future energy demand receded as France and Spain staged successful bond auctions, indicating investors have not been scared off by Standard and Poor’s recent downgrades of countries that use the euro common currency.
Analysts said the positive economic news was tempered by the weekly U.S. oil inventory report. The Energy Department said Thursday that the nation’s crude oil supplies declined about 1 percent last week but gasoline stocks rose 1.7 percent while demand over the past four weeks is down 6.1 percent from a year earlier.
“The market focused on the rising gasoline stocks which indicated continuing weak oil demand in the U.S. This has capped oil futures from gaining further despite some positive economic news from the U.S. and Europe,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
Analysts say oil prices will continue to swing between gains and losses until there is more certainty about the direction of the global economy.
In other energy trading, heating oil rose 0.4 cent to $3.04 per gallon and gasoline futures rose 0.6 cent to $2.83 per gallon. Natural gas added 0.2 cents to $2.32 per 1,000 cubic feet.