Oil prices hovered below $74 a barrel Monday in Asia as traders look to indicators on the U.S. economy and crude inventories for clues about the strength of demand.
Benchmark crude for October delivery was up 5 cents to $73.71 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 91 cents to settle at $73.66 on Friday.
Oil has traded in the $70s for most of the past year as strong demand from commodities in emerging economies is offset by a sluggish recovery in developed countries. In day-to-day trading, oil prices often follow stock markets and currencies as crude investors look for guidance on overall investor sentiment.
Crude inventories in the U.S. are near record highs, reflecting an uneven recovery from last year’s recession. Traders will be eyeing weekly supply figures along with the latest housing and job claims numbers later this week.
“We have seen the fundamentals exert a more powerful influence upon prices over the latest week or so and if it continues, the bulls could be in for a genuinely rude awakening,” Cameron Hanover said in a report.
“The only reason oil prices are above $70 a barrel is because investors have been using oil as a surrogate for the economy, equities or currencies.”
In other Nymex trading in October contracts, heating oil was steady at $2.099 a gallon and gasoline gained 0.92 cent to $1.928 a gallon. Natural gas fell 5.9 cents to $3.965 per 1,000 cubic feet.
In London, Brent crude fell 2 cents to $78.19 a barrel on the ICE Futures exchange.