Oil hovers near $78 amid positive US economic data

By ALEX KENNEDY Associated Press Writer

November 03, 2009

Oil prices hovered near $78 a barrel Tuesday in Asia as investors welcomed new U.S. manufacturing and construction figures as positive signs of an economic recovery.

Benchmark crude for December delivery was off 43 cents to $77.70 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.13 to settle at $78.13 on Monday.

Crude investors were encourged by signs of strength in the U.S. economy, which could help boost oil demand.

The Institute for Supply Management said Monday that U.S. manufacturing activity grew in October at the fastest pace in more than three years, while the Commerce Department reported that September construction spending posted a better-than-expected performance.

And the National Association of Realtors said the volume of signed contracts to buy previously occupied homes rose for the eighth straight month in September.

The positive news help push stocks higher, with the Dow Jones industrial index up 0.8 percent on Monday. Asian stock indexes were mixed on Tuesday.

"Oil was just really following the equities markets and overall opinion on the future of the U.S. economy," Seattle-based Sander Capital Advisors said in a report.

In other Nymex trading, heating oil fell 0.40 cent to $2.04 a gallon. Gasoline for December delivery dropped 0.88 cent to $1.98 a gallon. Natural gas for December delivery jumped 1.5 cents to $4.84 per 1,000 cubic feet.

In London, Brent crude for December delivery fell 14 cents to $76.41 on the ICE Futures exchange.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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