Oil above $89 in Asia thursday

Oil prices hovered above $89 a barrel Thursday in Asia after a report showed a bigger than expected drop in U.S. crude supplies, suggesting demand could be improving. Benchmark oil for October delivery was down 1 cent to $89.33 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude jumped $3.32, or 3.9 percent, to settle at $89.34 on Wednesday. In London, Brent crude for October delivery was steady $115.80 on the ICE Futures exchange. In other Nymex trading for October contracts, heating oil fell 1.0 cent to $3.07 per gallon and gasoline futures dropped 0.5 cent to $2.90 per gallon. Natural gas for October delivery slid 0.9 cent to $3.93 per 1,000 cubic feet. The American Petroleum Institute said late Wednesday that crude inventories fell 3.0 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 1.7 million barrels. Inventories of gasoline decreased 871,000 barrels last week while distillates increased 4.0 million barrels, the API said. The Energy Department''s Energy Information Administration reports its weekly supply data later Thursday. Analysts said the black Gold is likely to remain highly volatile during the day as uncertainty over global growth is likely to offset further gains on the back of rebounding stocks. However they added that gains on US and European stock markets, driven in part by a German court ruling that cleared the way for a bailout plan designed to address the euro zone’s sovereign debt crisis.