Crude oil prices steady below $109 after a sharp rise (AP) (08-04-2008)

SINGAPORE (AP) -- Oil prices were balancing just under $109 Tuesday after rising sharply by almost $3 a barrel on falling gasoline supplies and bets that further U.S. Federal Reserve rate cuts will weaken the US dollar.

Light, sweet crude for May delivery lost 24 cents to $108.85 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract raised $2.86 overnight to settle at $109.09 a barrel on the Nymex, the highest settlement for a front-month contract since March 18.

Oil futures are now nearing last month's trading record of $111.80 a barrel after a swoon that twice brought them briefly below $100. The rise is helped by a growing belief that gasoline supplies are falling as the summer driving season in the U.S. approaches.

The prospect that the Organization of Petroleum Exporting Countries will hold production steady this year also pushed oil prices higher Monday.

In other Nymex trading Tuesday, May heating oil futures fell 0.33 cent to $3.081 a gallon, while May gasoline prices lost 0.35 cent to $2.78 a gallon.

Natural gas futures dropped 3.6 cents to $9.755 per 1,000 cubic feet.

In London, May Brent crude fell 14 cents to $107 a barrel on the ICE Futures Exchange after rising $2.24 overnight to settle at $107.14 a barrel.

 Source: AP