Oil prices paused above $60 in Asia on Thursday after dropping 17 percent since last week as rising U.S. gasoline inventories suggested crude demand remains weak.
Benchmark crude for August delivery was up 48 cents to $60.62 a barrel at midday in Singapore in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract fell more than 4 percent, or $2.79, to settle at $60.14.
Prices have dropped from an eight-month intraday high of $73.38 a barrel on June 30 on evidence that U.S. drivers, who typically hit the road more during the Independence Day holiday last week, are staying home in droves this summer.
The Department of Energy reported Wednesday that gasoline in storage grew by another 1.9 million barrels last week, the fifth straight week that stocks have grown.
"That's not a good sign," said Clarence Chu, a trader at market maker Hudson Capital Energy in Singapore. "It shows demand for gasoline hasn't picked up like it normally does this time of year."
Other signals recently that the global economy and crude demand isn't recovering strongly from a severe slowdown have also helped undermine investor confidence. On Wednesday, The Organization of Petroleum Exporting Countries predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.
Last week, the unemployment rates in the U.S. and Europe rose to the highest in decades.
"There's been a string of bad news," Chu said. "The fundamentals didn't support the price at $70 in the first place."
"The momentum will likely take us into the $50s."
In other Nymex trading, gasoline for August delivery rose 1.4 cents to $1.65 a gallon and heating oil gained 0.94 cent to $1.55. Natural gas for August delivery jumped 3.6 cents to $3.39 per 1,000 cubic feet.
In London, Brent prices rose 57 cents to $61 a barrel on the ICE Futures exchange.
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