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Oil hovers above $89 in Asia after Obama proposes $447 billion jobs package
SINGAPORE (AP) ' Oil prices hovered above $89 a barrel Friday in Asia as investors mulled whether a new U.S. jobs package will help boost crude demand.
Benchmark oil for October delivery was up 12 cents to $89.17 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell 29 cents to finish at $89.05 on Thursday.
In London, Brent crude for October delivery was up 30 cents at $114.85 on the ICE Futures exchange.
In a bid to spark economic growth, President Barack Obama announced Thursday a $447 billion package for creating jobs.
The plan would slash the pension payroll taxes for tens of millions of workers and employers. It would also include $105 billion in public works projects and the renewal of $50 billion in unemployment benefits for about 6 million Americans at risk of losing jobless insurance. Congress must approve the bill.
Crude prices were bolstered by slowing inflation in China. Annual consumer prices rose 6.2 percent last month, cooling from a 37-month high of 6.5 percent in July. Investors are hoping that China may stop raising interest rates and allow faster economic growth.
Some analysts argue that fears about weakening global economic growth, which helped push crude down to $76 last month, are overblown and demand will outstrip supply long-term.
"Stop fretting about the gloom and doom of oil," Blue Ocean Brokerage said in a report. "We can't make this stuff fast enough even in a weak economic scenario. It's a finite commodity with infinite demand."
In other Nymex trading for October contracts, heating oil rose 1.1 cents at $3.06 per gallon and gasoline futures dropped 2.5 cents at $2.88 per gallon. Natural gas for October delivery slid 2.2 cents to $3.96 per 1,000 cubic feet.