SINGAPORE: Oil prices rose above US$73 a barrel Wednesday in Asia as an unexpected drop in U.S. crude supplies suggested demand may be recovering.
Benchmark crude for January delivery was up 57 cents to $73.19 at midday Singapore time in electronic trading on the New York Mercantile Exchange.
The contract dropped $1.31 to settle at $72.62 on Tuesday.
U.S. crude inventories unexpectedly fell last week, the American Petroleum Institute said late Tuesday.
Crude stocks fell 5.8 million barrels while analysts had expected an increase of 600,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The Energy Department's Energy Information Administration plans to announce its inventory report later Wednesday.
"If the EIA number is similar, I think the market will jump $2 or $3 because this is a very bullish number," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore.
Traders in Asia are also eyeing the U.S. dollar.
Investors tend to buy crude as a hedge against inflation and a weaker U.S. currency.
A strengthening dollar usually helps push oil prices down.
The euro rose to $1.4727 in early Wednesday trading from $1.4703 on Tuesday while the dollar was steady at 88.38 yen.
In other Nymex trading in January contracts, heating oil rose 0.54 cent to $2.00 while gasoline gained 1.54 cents to $1.94.
Natural gas jumped 1.5 cents to $5.13 per 1,000 cubic feet.
In London, Brent crude for January delivery rose 43 cents to $75.62 on the ICE Futures exchange. - AP
