Oil hovers near USD 107 after US gasoline supply drop

Singapore, Apr 14: Oil prices hovered above USD 107 a barrel today in Asia as a large drop in US gasoline supplies suggested the two-month crude rally hasn't yet undermined consumer demand.

Benchmark crude for May delivery was up 15 cents at USD 107.26 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained 86 cents to settle at USD 107.11 yesterday.

In London, Brent crude for May delivery was down 38 cents to USD 122.50 a barrel on the ICE Futures exchange.

The Energy Information Administration yesterday reported US gasoline supplies fell by 7 million barrels last week, a bigger drop than the 1.3 million barrels forecast by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.

"As gasoline stocks plunged, a major dent was placed in the argument that high prices are beginning to deter demand," Ritterbusch and Associates said in a report.

The EIA also said crude supplies rose by 1.6 million barrels last week to 359.3 million barrels, which is 1.5 percent above year-ago levels.

In other Nymex trading in May contracts, heating oil dropped 0.1 cents to USD 3.20 a gallon and gasoline fell 0.5 cents to USD 3.24 a gallon. Natural gas futures were down 0.2 cents at USD 4.13 per 1,000 cubic feet.

AP