SINGAPORE -Oil prices fell below $77 a barrel Thursday in Asia amid mixed signals about the strength of US crude demand. Benchmark crude for August delivery was down 19 cents to $76.85 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 11 cents to settle at $77.04 on Wednesday. Oil has traded between $70 and $80 this month as investors mull how much a pullback of government stimulus spending could undermine global economic growth and crude demand in the second half. On Wednesday, the Federal Reserve lowered its 2010 gross domestic product forecast by 0.2 percentage points to a range of 3.0 per cent to 3.5 percent, suggesting Europe's debt and fiscal crisis could undermine expansion of the world's No. 1 economy. Crude prices were supported by the weekly inventories report from the Energy Department's Energy Information Administration on Wednesday, which showed crude supplies shrank more than analysts had forecast, a sign demand may be improving. Some analysts expect strong oil demand from developing economies will offset sluggish consumption in rich countries and help push prices higher. China said Thursday its economy grew 10.3 per cent in the second quarter while Singapore reported a record 19.3 per cent surge Wednesday. "Consensus expectations still point to a continued healthy recovery in global oil demand ahead, concentrated in non-OECD countries," Barclays Capital said in a report. "Prices should start feeling increased upward pressure soon." In other Nymex trading in August contracts, heating oil fell 0.61 cent to $2.03 a gallon, gasoline was virtually unchanged at $2.0666 a gallon and natural gas rose 1.6 cents to $4.322 per 1,000 cubic feet. Brent crude was down 32 cents to $76.34 a barrel on the ICE futures exchange.
