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Oil falls below $89 in Asia after mixed US energy supply report
SINGAPORE (AP) ' Oil prices fell below $89 a barrel Thursday in Asia after a U.S. energy report showed mixed signals about demand.
Benchmark oil for October delivery was down 53 cents to $88.81 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude jumped $3.32, or 3.9 percent, to settle at $89.34 on Wednesday.
In London, Brent crude for October delivery sank 21 cents to $115.59 on the ICE Futures exchange.
The American Petroleum Institute said late Wednesday that crude inventories fell 3.0 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 1.7 million barrels.
Inventories of gasoline decreased 871,000 barrels last week while distillates, such as heating oil, increased 4.0 million barrels, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Thursday.
"The demand picture is a mixed bag in the U.S. with unemployment, stagnant income growth and efficiency weighing on gasoline consumption," J.P. Morgan said in a report. "We see gasoline demand shrinking this year while distillate use continues to strengthen moderately."
Some analysts think that slowing global economic growth will hurt crude demand and send prices lower.
"The oil market is still an appealing asset class in a near zero interest rate environment," energy consultant Ritterbusch and Associates said in a report. "But we still have difficulty constructing a bullish fundamental case for a market that's likely to be dogged by weak demand."
In other Nymex trading for October contracts, heating oil fell 2.0 cents to $3.06 per gallon and gasoline futures dropped 1.3 cents to $2.90 per gallon. Natural gas for October delivery slid 0.8 cent to $3.93 per 1,000 cubic feet.