Oil Price Hover Above $101 Amid Higher US Crude Supply

Oil prices hovered above $101 a barrel Wednesday in Asia after a report showed U.S. crude supplies jumped more than expected for a third week, suggesting demand remains weak.

Benchmark oil for May delivery was up 19 cents to $101.21 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.44 to settle at $101.02 in New York on Tuesday.

Brent crude for May delivery was down 30 cents at $119.58 per barrel in London.

The American Petroleum Institute said late Tuesday that crude inventories rose 6.6 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.8 million barrels.

Inventories of gasoline rose 1.2 million barrels last week while distillates tumbled 500,000 barrels, the API said.

The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.

A five-day global stock market sell-off has also undermined the optimism oil traders, who often look to equity markets as a measure of overall investor sentiment. The Dow Jones industrial average fell 1.7 percent Tuesday and most stock markets in Asia dropped Wednesday.

Some analysts expect oil prices will reverse the recent slide from $110 last month as growing crude demand in developing countries tightens global supplies. Goldman Sachs recommended investors buy the U.S. crude September futures contract.

“We expect that the overall oil market will continue to tighten in 2012, pushing oil prices substantially higher to restrain demand,” Goldman Sachs said in a report.

In other energy trading, heating oil was up 0.2 cent at $3.10 per gallon and gasoline futures slid 0.7 cent at $3.24 per gallon. Natural gas rose 0.1 cent at $2.03 per 1,000 cubic feet.