Oil hovers above $77 in Asian trade

Oil hovers above $77 in Asian trade

Singapore: Oil rose slightly in Asian trade on Wednesday as investors stayed on the sidelines ahead of a closely watched inventory report on US energy supplies, analysts said.

New York’s main contract, light sweet crude for delivery in September, gained five cents to $77.63 a barrel, while London’s Brent North Sea crude for September was nine cents higher at $76.31.

Investors were waiting for a weekly inventory report due Wednesday from the US Department of Energy, analysts said.

“We’re in sort of a holding pattern. Most people are waiting for the inventory report for their next move," said David Johnson, a Hong Kong-based oil analyst with Royal Bank of Scotland.

Market sentiment was also cautious following mixed economic data and disappointing US corporate earnings reports, he told AFP.

“There’s nothing coming that people can latch on to that’s proof that the world economy is getting better so prices are just slightly holding back," he told AFP.

Computer giant IBM and Wall Street investment bank Goldman Sachs on Tuesday announced their profits had slumped in the second quarter.

The disappointing earnings reports hit market sentiment, which was further weakened by a mixed report on the embattled US housing market.

Oil prices, however, edged higher on Tuesday on expectations of a drawdown in inventories, indicating higher demand for crude. The weekly snapshot is considered a key indicator of demand in the world’s biggest economy.

The average analyst forecast is that US crude oil stockpiles fell by 1.1 million barrels last week, according to a Dow Jones Newswires survey, suggesting stronger consumption.

Investors were also watching a tropical system brewing near the Caribbean island of Hispaniola, which could head towards the Gulf of Mexico, home to roughly 30 percent of US petroleum production.