SINGAPORE Oil hovered below US$78 a barrel Tuesday in Asia amid mixed signs about the global economy and crude demand.
Benchmark crude for January delivery was up 16 cents to $77.72 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange.
The contract rose 9 cents to settle at $77.56 on Monday.
Investor optimism was buoyed by a report Monday from the National Association of Realtors that October home sales rose more than 10 percent, suggesting strength in the U.S. economy.
But crude refiner Valero Energy said it shut down a plant last week because demand for oil products such as gasoline has been weak.
Crude has bounced between $76 a barrel and $82 for more than a month as a weakening dollar offsets concerns about tepid consumer demand.
Oil often trades inversely to the strength of the dollar as investors buy commodities as a hedge against inflation.
Societe Generale said weakness in the dollar and expectations of higher inflation have provided for a floor for the oil price, limiting losses.
"The ceiling has been set by weak refining margins, lackluster demand and a global economic recovery that is expected to be sluggish," it said in a report.
In other Nymex trading, heating oil was steady at $1.98 a gallon. Gasoline for December delivery held at $1.98 a gallon.
Natural gas for December delivery was little changed at $4.47 per 1,000 cubic feet.
In London, Brent crude for January delivery rose 20 cents to $77.66 on the ICE Futures exchange. - AP
Earlier report
Oil price higher on weak US$
NEW YORK: Oil prices jumped Monday and nearly touched $80 before falling, on a weakening dollar and surprising housing numbers which lifted hopes of an economic rebound.
Benchmark crude for January delivery rose 9 cents to settle at $77.56 a barrel on the New York Mercantile Exchange.
It traded as high as $79.92 earlier in the day.
The National Association of Realtors said U.S. home sales rose 10.1 percent in October.
That is the highest level in more than two years and helped push crude prices higher on expectations of increased demand.
Still, crude in storage is above normal levels for this time of year and refiners that turn oil into gasoline, jet fuel and diesel are cutting back because demand is so weak.
Valero Energy became the latest to shut down a refinery Friday, the largest U.S. facility shut down so far this year.
That follows other refiners like Sunoco and Western Refining, who have shut down plants in recent months and off almost 1,000 workers.
Refiners say they can't raise the price of gasoline and jet fuel because people aren't traveling as much, but they must pay higher prices for crude because of the weak dollar.
Investors holding stronger currencies can buy more dollar-based crude when the U.S. currency falls.
But the refiners that turn crude into gasoline, jet fuel and diesel are cutting back because demand is so weak Air travel is projected to decline 6.7 percent, or 2.3 million travelers this year compared to 2.5 million in 2008.
The dollar began the week lower as a Federal Reserve official urged the continuation of stimulus programs and as home sales in October greatly exceeded market expectations, revving up traders' taste for higher-yielding assets.
In late New York trading Monday, the 16-nation euro rose to $1.4973 from $1.4857, while the British pound jumped to $1.6621 from $1.6481.
The dollar was nearly flat at 89.02 Japanese yen from 88.96 yen.
And gold prices surged to a new record high of $1,174 an ounce as investors looked for an alternative investment to a declining buck.
The commodity is considered a hedge against the greenback because of its stable store of value.
In other Nymex trading, heating oil rose less than a penny to settle at $1.9799 a gallon.
Gasoline for December delivery fell less than a cent to settle at $1.9794 a gallon.
Natural gas for December delivery rose about 5 cents to settle at $4.473 per 1,000 cubic feet.
In London, Brent crude for January delivery fell 26 cents to settle at $77.46 on the ICE Futures exchange. - AP
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