Oil hovers below $103 amid signs of weak US demand

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Oil prices hovered below $103 a barrel Thursday in Asia after U.S. crude supplies rose more than expected for a fourth week, a sign demand remains tepid.

Benchmark oil for May delivery was up 25 cents to $102.92 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.53 to settle at $102.67 in New York on Wednesday.

Brent crude for June delivery was up 35 cents to $118.32 per barrel in London.

The Energy Information Administration said Wednesday that U.S. crude oil supplies grew by 3.9 million barrels last week. Analysts expected an increase of 400,000 barrels. The government's weekly report also said that U.S. gasoline demand fell 2.8 percent compared with a year ago.

Crude has traded above $100 a barrel for most of this year, sending gasoline prices to near $4 a gallon (about $1 a liter) in the U.S. If fuel costs rise much more, they could threaten consumer spending and fragile U.S. economic growth, said Fitch Ratings.

"The price of gasoline is a major determinant of U.S. consumer discretionary income and consumer spending is estimated to drive 70 percent of the U.S. economy," Fitch said in a report. "A short-term disruption in oil prices could therefore materially disrupt a U.S. economic recovery."

In other energy trading, heating oil was up 1.0 cent at $3.13 per gallon and gasoline futures gained 0.9 cents at $3.16 per gallon. Natural gas was steady at $1.95 per 1,000 cubic feet.