Oil nears $87 amid concerns on weakening U.S. economy

PanARMENIAN.Net - Oil prices eased to near $87 a barrel Thursday, August 18, in Asia on renewed concerns that the U.S. economy may weaken and hit fuel demand in the world's top crude consumer.

According to the Associated Press, benchmark oil for September delivery was down 39 cents to $87.19 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. Crude rose 93 cents to settle at $87.58 on Wednesday.

In London, Brent crude for October delivery was down 21 cents to $110.39 a barrel on the ICE Futures exchange.

Oil was lower Thursday in line with falls in Asian stock markets, analysts said.

Energy analyst Ritterbusch and Associates said oil prices are likely to remain volatile ahead of the release of a slew of U.S. economic data later Thursday including jobless claims, the consumer price index and home sales.

Other analysts said sentiment was also negative after the Energy Information Administration data showed crude inventories rose last week.

However, gasoline inventories dropped which suggested improving demand for gasoline, and this indicated refineries will also need more oil, which is used to make gasoline.

In other Nymex trading for September contracts, heating oil was nearly unchanged at $2.961 per gallon and gasoline futures fell 0.2 cent to $2.738 per gallon. Natural gas slipped 0.1 cent to $3.926 per 1,000 cubic feet.