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Oil below $86 amid weak indicators, earnings

Associated Press Modified: January 28, 2011 at 2:17 am •  Published: January 27, 2011
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BANGKOK (AP) — Oil prices hovered below $86 a barrel Friday in Asia, dragged lower by weak economic and earnings news.

Benchmark crude for March delivery was down 7 cents at $85.57 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange.

The contract lost $1.69 to settle at $85.64 a barrel on Thursday and is down from nearly $93 a barrel last week as evidence accumulated that demand isn't strong enough to sustain crude prices at those levels.

That the U.S. economy, the world's biggest, continues to crawl was underlined by weak growth in durable goods orders for December and a rise in the number of Americans applying for unemployment benefits last week.

Meanwhile U.S. companies that are bellwethers for consumer spending reported disappointing earnings.

Amazon.com uncharacteristically missed Wall Street's revenue target. Both Procter & Gamble Co. and rival Colgate-Palmolive Co. reported lower profits.

Those indicators came ahead of the release later Friday of growth figures for the October-December quarter.

In other Nymex trading for February contracts, heating oil rose 1.6 cents to $2.67 a gallon and gasoline added 0.7 cent to $2.389 a gallon. Natural gas futures for March delivery were up 1 cent at $4.33 per 1,000 cubic feet.

In London, Brent crude was up 59 cents at $97.97 on the ICE futures exchange.