Oil near $99 amid signs of weakening demand

May 20, 2011 - 1:58 AM

SINGAPORE (AP) — Oil prices rose slightly to near $99 a barrel Friday in Asia as traders mulled whether the global economy will weaken this summer and undermine crude demand.

Benchmark crude for June delivery was up 47 cents to $98.91 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. In London, Brent crude for July delivery was up 21 cents to $111.63 a barrel on the ICE Futures exchange.

Crude has bounced around in the upper-$90s most of this week as investors eye a volatile U.S. dollar and mixed signs about the strength of the U.S. economy and oil demand.

The International Energy Agency said Thursday that higher fuel costs — crude jumped to near $115 earlier this month from $84 in February — threaten to slow the global economic recovery. Japan said its economy slipped into recession last quarter after gross domestic product fell an annualized 2.3 percent in the January-to-March period.

"The fundamentals for commodity prices are starting to weaken as the world economy slows and supply recovers from recent shocks," Capital Economics said in a report.

In other Nymex trading in June contracts, heating oil rose 0.3 cent to $2.90 a gallon and gasoline dropped 2.3 cents to $2.90 a gallon. Natural gas futures slid 0.2 cent to $4.09 per 1,000 cubic feet.