Oil prices rose above $44 a barrel Friday in Asia on investor optimism that falling US gasoline costs amid the worst recession in decades may increase demand for crude. Benchmark crude for April delivery rose 90 cents to $44.51 a barrel by late afternoon in Singapore on the New York Mercantile Exchange. US gasoline prices averaged $1.933 a gallon Thursday – $1.245 a gallon cheaper than they were last year – and falling fuel costs have helped spark some crude demand. The government said earlier in the week that crude inventories fell for a second week in three, halting a trend over the previous six weeks that saw inventories jump more than 30 million barrels. “It's cheap now to fill up your car, and that's starting to have some impact,” said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore. “There's a sense that because crude has gotten cheaper, demand may be picking up. We've seen inventories surprise on the downside.” Oil prices fell $1.77 on Thursday to settle at $43.61 a barrel as the Dow Jones industrial average dropped 4.1 percent to a fresh 12-year low on concern General Motors Corp. may face bankruptcy and worries about Citigroup and other big banks. Crude investors have looked to stock markets as broad measure of investor sentiment on the economy. But oil prices have traded near $40 since December while global stock markets continue to drop. “Crude is not so directly related to equities as it has been,” Moltke-Leth said. “We saw a major sell-off in stocks yesterday, but crude was pretty stable.” Output cuts by OPEC have helped reduce supplies and bolster prices. The Organization of Petroleum Exporting Countries will likely announce another cut production at the group's next meeting on March 15, Moltke-Leth said. “Supply and demand are pretty much balanced at the moment,” he said. In other Nymex trading, gasoline for April delivery was steady at $1.34 a gallon, while heating oil was steady at $1.16 a gallon. Natural gas for April delivery was up 3.3 cents at $4.12 per 1,000 cubic feet. Brent prices rose 66 cents to $44.30 on the ICE Futures exchange in London.
