Oil prices hovered above $70 a barrel today in Asia as investors weighed mixed signals from the US economy amid tumbling equity markets.
Benchmark crude for July delivery rose 10 cents to $70.57 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. Yesterday, it fell 15 cents to settle at $70.47.
Oil prices this week have come off eight-month highs near $73 a barrel amid some signs that the US economy -- while past the worst of a severe recession -- is still weak. The Federal Reserve said yesterday that industrial production fell a larger-than-expected 1.1 per cent in May.
After a rally of almost 40 per cent since March 9, the Dow Jones industrial average has fallen 3.3 per cent over the first two days of the week.
Meanwhile, the Commerce Department said home construction jumped in May by the largest amount in three months after hitting a record low in April.
"There have been some mixed signs," said Toby Hassall, an analyst with investment firm Commodity Warrants Australia in Sydney. "The last few days we've seen a turn toward negative sentiment. Oil looks set for a correction".
Crude traders have also been watching the dollar. A weakening dollar helped fuel a doubling of the oil price since March as investors often look to commodities such as crude as a hedge against inflation.