Updated on Wednesday, November 04, 2009, 11:58 IST Tags:Oil,  price, fuel

Singapore: Oil prices fell slightly to near USD 79 a barrel on Wednesday in Asia despite an unexpected drop in US crude supplies which suggested demand may be picking up.

Benchmark crude for December delivery was down 20 cents to USD 79.40 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained USD 1.47 to settle at USD 79.60 yesterday.

US oil inventories dropped last week, the American Petroleum Institute said late yesterday. Crude stocks fell 3.3 million barrels while analysts had expected a rise of 1.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Information Administration is scheduled to release its supply data later today.

Crude has fallen from its 2009 high of USD 82 a barrel last month on investor doubts about the strength of the US economy. Some analysts say the oil price could fall further if a monthly US unemployment report on Friday confirms the number of jobless continues to swell.

"We still feel that a decline toward the USD 75 area could be forthcoming as this week proceeds," Galena, Illinois-based Ritterbusch and Associates said in a report.

In other Nymex trading, heating oil fell 1.21 cents to USD 2.06 a gallon. Gasoline for December delivery dropped 0.99 cent to USD 1.99 a gallon. Natural gas for December delivery was steady at USD 4.92 per 1,000 cubic feet.

Bureau Report