Oil lingers below $77 amid investor doubts about US crude demand

Oil lingers below $77 amid US demand concerns

SINGAPORE — Oil prices lingered below $77 a barrel Friday in Asia amid investor doubts about U.S. crude demand.

Benchmark crude for December delivery, which earlier fell to as low as $76.00, was down 15 cents to $76.79 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gave up $2.34 to settle at $76.94 on Thursday.

The U.S. Energy Information Administration said Thursday in its weekly report that oil inventories rose 1.8 million barrels and gasoline stocks grew 2.5 million, both larger-than-expected increases.

Oil has bobbed between $76 and $82 for the last month as traders mull how much a high U.S. unemployment rate, which rose to 10.2 percent in October, will drag on consumer demand for crude products such as gasoline.

“I don’t think demand will pick up until the economy starts creating jobs,” said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore.

Last month, crude broke through a $65-$75 range that it had been in for most of the summer on signs the economy was recovering. Some analysts expect crude to stay above that range going into 2010.

“The immediate floor to prices has been moving up, beyond $70 per barrel and perhaps as high as $75 per barrel,” Barclays Capital said in a report. “Market dynamics have returned to being a fairly relaxed chess game.”

In other Nymex trading, heating oil fell 0.90 cent to $1.98 a gallon. Gasoline for December delivery dropped 0.54 cent to $1.94 a gallon. Natural gas for December delivery was steady at $4.38 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 12 cents to $75.90 on the ICE Futures exchange.