Oil inches up on doubts about US, eurozone economies

Oil prices inched marginally higher in Asian trade today with investor sentiment clouded by worries about the US and eurozone economies, analysts said.

New York's main contract, light sweet crude for September delivery, gained eight cents to $79.06 a barrel and Brent North Sea crude, also for September delivery, was 10 cents higher at $77.60.

"There are a lot of mixed signals," said David Johnson, a Hong Kong-based oil analyst with the Royal Bank of Scotland.

"There is not enough confidence in the US and Europe (economic) recovery... A lot of people are getting slightly concerned about what's happening," he told AFP.

Skepticism over European banking-sector stress tests, which cleared all but seven European lenders, got a subdued welcome on stock markets yesterday while investors remained concerned about the pace of US recovery from the global slump.

However, latest data yesterday from the Commerce Department showed new home sales increased 23.6 per cent to 330,000 units in June from a revised May rate of 267,000, a record low.

The housing sector was at the epicentre of the financial crisis that plunged the US economy into recession in December 2007.

Meanwhile, investors are waiting for the release of a weekly government report on US energy stockpiles regarded as a gauge of demand in the world's biggest economy.

Last week's inventory data showed an unexpectedly big rise in crude stocks and investors expect the report to show a drop in energy reserves when the Department of Energy releases its report tomorrow.