Oil up in Asia on signs of improved US demand

I / Singapore July 07, 2011, 9:50 IST

Crude was up in Asia today on signs that oil demand is picking up in the United States, the world's largest consumer of the commodity, analysts said.

New York's main contract, West Texas Intermediate for August delivery, rose 66 cents to $97.31 a barrel and Brent North Sea crude for August gained 57 cents to $114.19.

The American Petroleum Institute yesterday reported a bigger than expected drawdown in crude reserves, seen as a sign of improved demand in the world's biggest economy.

"US crude oil stockpiles fell unexpectedly by 3.2 million barrels, more than analysts' prediction of 2.3 million barrels, which was supportive for crude oil prices," said Ker Chung Yang, commodity analyst at Phillip Futures in Singapore.

However, concerns about future Chinese demand are expected to keep a lid on crude prices after Beijing on Wednesday raised interest rates for the third time this year in a bid to rein in inflation.

China, the world's second biggest economy, is the largest energy consumer.