Reported on: March 15, 2012 14:53 PM
Reported in: International
SINGAPORE, Mar 15 (AP/UNB) - Oil prices hovered below $106 a barrel Thursday in Asia amid trader concerns that growing U.S. crude supplies reflect weak demand.
Benchmark oil for April delivery was up 24 cents to $105.67 in electronic trading on the New York Mercantile Exchange. The contract ell $1.28 to settle at $105.43 per barrel in New York on Wednesday.
Brent crude for April delivery was down 29 cents at $124.68 per barrel in London. The April contract expires later today.
The Energy Department's Energy Information Administration said Wednesday crude inventories rose 1.8 million barrels last week. At the key storage facility in Cushing, Oklahoma, supplies rose 2.5
million barrels last week and have jumped 10 million barrels during the last two months.
"The magnitude of the Cushing supply build is beginning to exceed most expectations," energy consultant Ritterbusch and ssociates said in a report. "Our previously targets of crude at the
$112-113 area are beginning to appear out of reach with Cushing supply mounting."
Oil prices have risen from $75 in October amid investor optimism n improving U.S. economy will boost crude demand. However, the EIA said Wednesday that gasoline demand was down 7.2 percent from a year go.
Traders have been eyeing in recent weeks the likelihood that a possible military strike by Israel or the U.S. against Iran's nuclear acilities could take some or all of Iran's 4 million barrels a day
of crude output off the market.
Saudi Arabia's top oil official sought to assuage those fears Wednesday, saying his country and other oil exporters are ready to roduce more to offset any supply shortfall, if needed.
In other energy trading, heating oil was down 0.4 cent at $3.26 per gallon and gasoline futures fell 0.5 cent at $3.34 per gallon. atural gas slid 3.3 cents at $2.25 per 1,000 cubic feet.