Oil rises to near $89 in Asia

Oil prices rose to near $89 a barrel Tuesday in Asia after a stock market rally late in US trading boosted investor confidence. Benchmark oil for October delivery was up 78 cents to $88.97 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude rose 95 cents to settle at $88.19 on Monday. In London, Brent crude for October delivery was up 48 cents at $112.16 on the ICE Futures exchange. A late surge pushed the Dow Jones industrial average up 0.6 per cent Monday and most Asian stock markets gained Tuesday. Oil traders often look to equities as a barometer of overall investor sentiment. A recent pledge by the US Federal Reserve to keep lending rates low for the next two years has also helped bolster commodity prices. ``Crude still appear to be supported by oil''s long-term appeal as an asset class amid additional stimulus efforts that include a sustainable low interest rate environment beyond next year,'''' Ritterbusch and Associates said in a report. Crude has traded between $80 and $90 during the last month amid growing investor concern that Greece may default on its debt. Traders are worried a Greek default could trigger similar moves in Portugal, Ireland, Spain and Italy and spread into a global financial crisis. A slowing global economy also weighed on oil prices. The Organization of Petroleum Exporting Countries said Monday it cut its 2011 forecast for world oil demand because it expects slumping global economic growth to undermine consumer demand. In other Nymex trading for October contracts, heating oil rose 0.6 cents at $2.95 per gallon and gasoline futures gained 1.1 cents at $2.75 per gallon. Natural gas for October delivery slid 0.5 cent to $3.89 per 1,000 cubic feet