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Singapore - Oil prices hovered above $98 a barrel on Tuesday
in Asia as concern grew that Europe's debt crisis is worsening and Chinese
demand for crude showed signs of waning.
Benchmark oil for July delivery was up 54 cents to $98.24 a
barrel at midday Singapore time in electronic trading on the New York
Mercantile Exchange. In London, Brent crude for July delivery was up 65c to
$110.75 a barrel on the ICE Futures exchange.
The benchmark contract lost $2.40 to settle at $97.70 on
Monday as the dollar strengthened amid growing investor concern about Europe's
debt crisis. Crude also fell on fears China's economic expansion is slowing
after Platts, the energy information arm of McGraw-Hill, reported that growth
in crude consumption fell in April.
Slowing economic growth in the US, Europe and China will
likely hurt oil consumption and push oil prices down in the second half, said
Richard Soultanian of NUS Consulting, who expects crude to average $88 in the
fourth quarter.
"The risk of a significant pullback in both the
commodities and equities markets is uncomfortably high," Soultanian said.
"The decline in the past weeks is the canary in the coal mine indicating
that energy markets will undergo a more sustained and consistent decline in the
coming months."
Oil has dropped from a 30-month high near $115 a barrel on
May 2.
In other Nymex trading in June contracts, heating oil rose 2.2 cents to $2.87 a gallon and gasoline dropped 1.0c to $2.95 a gallon. Natural gas futures fell 1.0c to $4.34 per 1 000 cubic feet.
