Global Biz

Oil falls to near $77 on unexpected US supply jump

(Agencies)
Updated: 2010-07-28 15:26

SINGAPORE?- Oil prices fell to near $77 a barrel Wednesday in Asia after a report showed US crude supplies unexpectedly rose last week, suggesting demand remains weak.

Benchmark crude for September delivery was down 22 cents at $77.28 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.

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Crude inventories jumped 3.1 million barrels last week, the American Petroleum Institute said late Tuesday. Analysts had expected a drop of 2.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Supplies of gasoline and distillates also rose, the API said.

The Energy Department's Energy Information Administration is scheduled to report its supply data later Wednesday.

The contract lost $1.48 to settle at $77.50 on Tuesday after disappointing data on US consumer confidence and manufacturing.

Oil has bounced within the $70s for most of this year, with doubts about the strength of the US economic recovery helping to undermine any move above $80.

"With the price near $80, there would have to be some extreme bullishness to witness a break to the upside," Sander Capital said in a report. "The price of oil should stay in the $75 range for now."

In other Nymex trading in August contracts, heating oil fell 0.19 cent to $1.9975 a gallon, gasoline dropped 0.72 cent to $2.0560 a gallon and natural gas was steady at $4.680 per 1,000 cubic feet.

Brent crude was down 7 cents to $76.06 a barrel on the ICE futures exchange.