Oil lingers near $65 as US crude supplies rise

Oil prices lingered near $65 a barrel today in Asia as rising US crude inventories suggested consumer demand remains sluggish in the world's biggest economy.

Benchmark crude for September delivery was down 53 cents to $65.08 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. Yesterday, the August contract expired, rising 74 cents to settle at $64.72.

US crude inventories rose 3.1 million barrels last week while gasoline supplies gained 1.3 million, the American Petroleum Institute said last night. Analysts expected the API numbers to fall 2.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Investors will be watching for inventory data from the Energy Department's Energy Information Administration today for more signs crude demand may be waning.

The API numbers are reported by refiners voluntarily while the EIA figures are mandatory.

Oil prices have risen from $58.78 a barrel two weeks ago on stronger than expected second quarter corporate earnings. Some of the improved company results have been the result of cost cutting such as layoffs, which in turn is dragging on consumer demand.

Federal Reserve Chairman Ben Bernanke said Tuesday that the economy is still on track to recover this year, but slowly. He also predicted rising unemployment.