Oil prices hovered above $98 a barrel Tuesday in Asia as concern grew that Europe's debt crisis is worsening and Chinese demand for crude showed signs of waning.
Benchmark oil for July delivery was up 54 cents to $98.24 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
In London, Brent crude for July delivery was up 65 cents to $110.75 a barrel on the ICE Futures exchange In other Nymex trading in June contracts, heating oil rose 2.2 cents to $2.87 a gallon and gasoline dropped 1.0 cent to $2.95 a gallon.
Natural gas futures fell 1.0 cent to $4.34 per 1,000 cubic feet Analysts said the black gold took advantage of speculation that Libyan supply cuts will reduce OPEC’s spare production capacity that offset concerns over euro zone debt worries.
They also attributed oil’s slight recovery to positive forecast by major banks Goldman Sachs Group Inc. and Morgan Stanley.
The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21.
It averaged 76 cents last year. On Friday, The benchmark contract lost $2.40 to settle at $97.70 as the dollar strengthened amid growing investor concern about Europe's debt crisis.
Crude also fell on fears China''s economic expansion is slowing after Platts, the energy information arm of McGraw-Hill Cos., reported that growth in crude consumption fell in April.
In London, a barrel of Brent North Sea for July lost $2.29 to settle at $110.10