Oil rose above $98 a barrel Wednesday, December 21, in Asia after a report showed U.S. crude supplies fell more than expected, a sign demand may be improving, AP reports.
Benchmark crude for February delivery was up 80 cents to $98.04 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
In London, Brent crude was up 25 cents at $106.98 on the ICE futures exchange.
The American Petroleum Institute said late Tuesday that crude inventories rose 4.6 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 2.3 million barrels.
Inventories of gasoline slid 2.8 million barrels last week while distillates dropped 400,000 barrels, the API said.
Evidence the U.S. economy is improving also helped extend Tuesday's gains in the oil price. U.S. retailers said that holiday sales jumped last week, while the government reported a surge in apartment construction and building permits in November.
Some analysts remain pessimistic about the global economy and expect a slowdown to undermine demand for commodities.
"We expect the problems in the eurozone to escalate and global growth to remain sluggish, maintaining the downward pressure on the prices of commodities," Capital Economics said in a report.
