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Oil hovers under $71

September 16, 2009 5:51:57 AM PDT
Oil traded just below $71 a barrel Wednesday as an unexpected rise in U.S. crude supplies heightened investor concerns about weak consumer demand.

Benchmark crude for October delivery was down 18 cents to $70.75 a barrel by late morning in Europe in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract rose $2.07 to settle at $70.93.

Crude prices have hugged the $70 level for months as gasoline demand remains sluggish amid signs the global economy is recovering.

On Tuesday, a SpendingPulse report by MasterCard showed the four-week average for gasoline consumption in the U.S. fell 3.2 percent for the week ended Friday, the ninth straight weekly decline.

U.S. oil inventories rose last week, more evidence demand remains tepid, the American Petroleum Institute said late Tuesday. Crude stocks increased 631,000 barrels while analysts had expected a drop of 3.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Supplies of gasoline grew 1.3 million barrels while distillates jumped 5.2 million barrels, the API said.

A weakening U.S. dollar has also helped support oil prices. The euro rose Wednesday to $1.4688 from $1.4656 the previous day while the dollar fell to 90.29 yen from 91.03 yen.

In other Nymex trading, gasoline for October delivery fell 1.55 cents to $1.77 a gallon, and heating oil was down 1.8 cents to $1.76 a gallon. Natural gas jumped 12.7 cents to $3.45 per 1,000 cubic feet.

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Associated Press writer Alex Kennedy in Singapore contributed to this report.

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