Oil hangs hear $70 in Asia after big tumble on worries Chinese demand is fading

Oil hangs near $70 in Asia after big tumble

BANGKOK — Oil prices hung near $70 a barrel Tuesday in Asia after falling steeply overnight amid news that China’s crude consumption fell in August.

Benchmark crude for October delivery was up 59 cents at $70.30 a barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $2.33 to settle at $69.71 on Monday.

Energy consumption in North America and Europe has been crimped by recession, leaving China as one of the few countries that continue to consume oil, gasoline and diesel in growing quantities. That pace, at least during late summer, appeared to slow, according to a report released Monday.

Chinese oil demand slid 5.4 percent in August from July, the first month-to-month drop since March, according to Platts, the energy information arm of McGraw-Hill Cos., as the world’s second-largest oil consumer reined in oil imports and crude throughput rates at its domestic refineries.

But some analysts expect a second-half recovery in demand from Europe and the U.S. combined with still decent energy appetite from Asia to boost oil prices.

“I think we’re going to see a pretty significant recovery in the second half in the U.S. and Europe, and demand from China has been holding up,” said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. “I see more upside than downside for oil prices right now.”

Moltke-Leth said crude could rise above $75 during the next month. “If we can break through that, prices will likely jump to $80.”

In other Nymex trading, gasoline for October delivery rose 1.61 cents to $1.7675 a gallon, and heating oil rose 2.12 cents to $1.7729 a gallon. Natural gas, after tumbling more than 5 percent, was up 10.5 cents to $3.681 per 1,000 cubic feet.

In London, Brent crude rose 62 cents to $69.33 on the ICE Futures exchange.

Associated Press Writer Alex Kennedy contributed to this report from Jakarta.