Oil hovers above $86 in Asia

Oil prices hovered above $86 a barrel Wednesday in Asia amid hopes that President Barack Obama''s major policy speech later this week will provide a catalyst for stronger US economic growth. Benchmark oil for October delivery was up 15 cents to $86.17 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell 43 cents to settle at $86.02 on Tuesday. In London, Brent crude for October delivery was up 10 cents at $112.99 on the ICE Futures exchange. In other Nymex trading for October contracts, heating oil added 1.3 cents at $3.02 per gallon and gasoline futures gained 0.5 cent at $2.83 per gallon. Natural gas for October delivery slid 0.3 cent to $3.93 per 1,000 cubic feet. Analysts said oil prices are likely to advance further during the day after Tropical Storm Lee shut production in the Gulf of Mexico, major oil producing region for world’s largest oil consumer. Another disturbance in Mexico’s Bay of Campeche may become a tropical cyclone. Brent’s premium to U.S. prices widened from a record close. Europe''s debt crisis has also weighed on oil prices and stock markets. The Dow Jones industrial average fell 0.9 per cent Tuesday. US Energy Department is scheduled to release its weekly stockpile report later in the day. On Monday, Crude Oil prices dropped, hit by weak economic data in the United States and China, the world''s two biggest consumers of energy.