Oil hovers above $76 amid signs US economy is weak

SINGAPORE — Oil prices hovered above $76 a barrel Thursday in Asia amid signs the US economic recovery and demand for crude remain uneven. Benchmark crude for August delivery was up 12 cents to $76.46 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.50 to settle at $76.35 on Wednesday. The Energy Information Administration said Wednesday that crude oil supplies increased by 2 million barrels last week, while analysts were expecting stockpiles to drop. Traders got more discouraging news when the government said new home sales dropped by a third to a record low last month. Oil had jumped from $64 a barrel late last month on investor optimism that Europe's debt and fiscal woes wouldn't significantly slow the US and global economic recovery. The Federal Reserve said Wednesday that "financial conditions have become less supportive of economic growth," citing "developments abroad" without mentioning Europe by name. "It was one thing to bid up oil prices on the presumption that an economic recovery would improve the outlook for everything," Cameron Hanover said in a report. "With economic numbers now seemingly weakening again, it's not as easy to dismiss the stock surpluses that exist in oil inventories." In other Nymex trading, heating oil rose 0.1 cent to $2.0692 a gallon, gasoline gained 0.27 cent to $2.0850 a gallon and natural gas dropped 0.9 cent to $4.795 per 1,000 cubic feet. Brent crude was rose 21 cents to $76.48 on the ICE futures exchange. — AP