Oil hovers above $75 in Asia amid economic worries

Oil prices edged up in Asia for the first time in five days Tuesday with gains tempered by signs of a slowing global economic recovery that could dent demand for fuel.Benchmark crude for September delivery was up 10 cents to $75.34 a barrel at midday Kuala Lumpur time in electronic trading on...

KUALA LUMPUR, Malaysia (AP) — Oil prices edged up in Asia for the first time in five days Tuesday with gains tempered by signs of a slowing global economic recovery that could dent demand for fuel.

Benchmark crude for September delivery was up 10 cents to $75.34 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell 15 cents to settle at $75.24 a barrel on Monday.

Oil rebounded Tuesday after dropping from above $81 a barrel early last week amid resurgent fears that the world economy may not grow as much as expected in the second half.

"What has been driving prices in the past week has been the perception that the world is going to have a major slide down. At the moment, that is perception but not fact," said Nick Raffan, head of mining and resources research at consultancy Fat Prophets in Sydney.

Japan's surprisingly low economic growth in the second quarter, coupled with a disappointing regional manufacturing report in the U.S. dampened market sentiment. Indicators from China, the world's biggest energy consumer, also show growth is slowing as Beijing clamps down on a credit splurge.

But Raffan said industrial output remained strong in Europe and other parts of the world. Despite expectations of a slowdown, he said the global economy remained robust and would not reverse into the red.

Oil is likely to remain in volatile trade between $70 and $80 a barrel in the short to medium-term. Raffan said prices could surge above $100 in two years.

In other Nymex trading in September contracts, heating oil added 0.7 cent to $1.996 a gallon and gasoline rose 0.97 cent to $1.934 a gallon. Natural gas was higher by 0.2 cent at $4.23 per 1,000 cubic feet on the Nymex.

Brent crude was up 3 cents at $75.66 a barrel on the ICE futures exchange.

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