Oil prices hovered for a second day near $79 a barrel Tuesday in Asia as investors weighed a three-day stock market rally against signs of sluggish U.S. crude demand.

Benchmark crude for September delivery was down 3 cents at $78.95 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract was unchanged to settle at $78.98 on Monday.

Surging U.S. stock markets have underpinned oil prices as traders often look to equities as a barometer of overall investor sentiment. The Dow Jones industrial average rose 1 percent Monday and is up about 4 percent in the last three trading sessions. Most Asian stocks gained Tuesday.

“We still see a relatively close linkage between the stock market and the oil for now,” Ritterbusch and Associates said.

Meanwhile, U.S. crude inventories in recent weeks have either grown or fallen less than analysts expected, suggesting consumption remains tepid. The American Petroleum Institute reports supply data for last week later Tuesday with the Energy Department’s Energy Information Administration reporting Wednesday.

“Oil fundamentals are looking more bearish with each successive EIA report,” Ritterbusch said.

In other Nymex trading in August contracts, heating oil rose 0.24 cent to $2.045 a gallon, gasoline was steady at $2.106 a gallon and natural gas gained 2.6 cents to $4.638 per 1,000 cubic feet.

Brent crude was down 7 cents to $77.43 a barrel on the ICE futures exchange.

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