TOKYO (MarketWatch) -- Crude-oil futures traded modestly higher in electronic trading Thursday afternoon in Asia, holding their ground above $68 as U.S. gasoline demand offset pressure from a smaller-than-expected fall in the nation's crude supplies.
Crude for October delivery was up 23 cents at $68.28 a barrel on Globex by Thursday afternoon in Tokyo. The contract finished unchanged at $68.05 on the New York Mercantile Exchange Wednesday.
"As we expected, driving-season demand was strong, with implied demand up sharply," said Jason Schenker, president of Prestige Economics. But "crude inventories remained relatively unchanged and fell less than the consensus had expected."
In an update for the week ended Aug. 28, the Energy Information Administration reported Wednesday morning in Washington that crude-oil inventories fell by 400,000 barrels. Analysts surveyed by Platts had expected a decline of 1.9 million barrels.
But petroleum products supplied, an implied gauge of demand, rose 1.2% to 19.7 million barrels a day, the EIA's data showed. Gasoline demand was up 4.1% to 9.48 million barrels a day, the highest level since the week ended May 22. Gasoline inventories fell by 3 million barrels last week.
Despite recent declines in crude oil and gasoline inventories, Phil Flynn, a senior market analyst at PFGBest, said that "oil is getting heavier and heavier as the market is heading into the weakest demand period of the year with more than ample supply."
