Oil hovers near $71 in Asia amid signs of rising US crude supplies

Oil hovers near $71 amid US crude supply jump

SINGAPORE — Oil prices hovered near $71 a barrel Wednesday in Asia with gains tempered by a U.S. crude supply report that showed an unexpected rise in inventories last week.

Benchmark crude for January delivery was up 40 cents to $71.09 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract added $1.18 to settle at $70.69.

U.S. crude inventories unexpectedly rose last week, the American Petroleum Institute said late Tuesday. Crude stocks rose 920,000 barrels while analysts had expected a drop of 2.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department’s Energy Information Administration plans to announce its inventory report later Wednesday.

“There’s clearly a lot of inventory to chew through,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. “Crude demand is weak right now, but it should slowly improve in 2010.”

Oil prices have fallen from $82 a barrel in October after surging from $32 in December 2008.

In other Nymex trading in January contracts, heating oil rose 1.67 cents to $1.92 while gasoline gained 1 cent to $1.855. Natural gas jumped 2.8 cents to $5.55 per 1,000 cubic feet.

In London, Brent crude for January delivery rose 50 cents to $72.55 on the ICE Futures exchange.