Oil hovers above $96 in Asia

Oil prices hovered above $96 a barrel Thursday in Asia amid light trading volume ahead of a U.S. holiday. Benchmark crude for January delivery was up 1 cent at $96.18 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.84 to settle at $96.17 in New York on Wednesday. Brent crude for January delivery was steady at $106.70 a barrel on the ICE Futures Exchange in London. Markets in the U.S. are closed Thursday for the Thanksgiving holiday. Crude has fallen from above $103 last week amid investor concern the Europe debt crisis will undermine global economic growth and oil demand. However, crude inventories have dropped in recent months in the U.S. and Europe. Crude supplies fell by 6.2 million barrels last week and are about 8% below year-ago levels, the Energy Department’s Energy Information Administration said Wednesday. "The low inventory situation has prevented oil prices from falling sharply," Bank of America Merrill Lynch said in a report. "But eventually, deteriorating financial conditions could start to impact economic activity and bring oil prices somewhat lower." Bank of America said it expects Brent crude to average $104 in the first quarter of next year. In other Nymex trading, heating oil rose 1 cent to $2.98 per gallon and gasoline futures gained 1.2 cents to $2.53 per gallon. Natural gas was steady at $3.61 per 1,000 cubic feet. (QNA) ST/LY