Oil regains some ground

Crude prices rise ahead of a government report expected to show another dip in stockpiles.

SINGAPORE (AP) -- Oil prices rose Tuesday after slipping in the previous session to a two-week low on worries about the U.S. economy.
Futures were also supported by expectations a midweek U.S. report on oil inventories would show crude stockpiles fell for the eighth straight week.
Oil inventories are predicted to drop 300,000 barrels in the week ended Jan. 4, according to the average forecast in a Dow Jones Newswires poll of analysts.
Gasoline inventories on average are expected to rise 1.7 million barrels while distillate stocks are tipped to fall 600,000 barrels. Refinery use is expected up 0.2 percentage point to 89.6 percent of capacity.
"The combination of robust demand growth and anemic oil supply growth has underpinned the recent U.S. stock draw and we believe will continue to support further draws in the near future," Goldman Sachs has said in a research note.
Light, sweet crude for February delivery rose 64 cents to $95.73 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.
The contract on Monday dropped $2.82 to settle at $95.09 a barrel.
Comments by U.S. Treasury Secretary Henry Paulson Monday suggesting there is no simple fix for the U.S. housing crisis added to worries about the economy raised by last Friday's Labor Department jobs report. The government's data showed that employers added far fewer jobs last month than expected.
"Year after year as oil has gone up I've told you it was a story of economic growth," wrote Phil Flynn, an analyst at Alaron Trading Corp., of Chicago, in a research note. "By the same token, if the U.S. slips into a recession, then do not expect oil to keep going higher."
"The weakening jobs market in the U.S. has the Fed backed into a corner and the prospect for oil looks about as bearish in 2008" as it has since the days after the Sept. 11, 2001, terrorist attacks, Flynn wrote.
Brent crude for February delivery rose 16 cents to $94.55 a barrel on the ICE Futures exchange in London.
Heating oil futures rose 1.6 cents to $2.6095 a gallon (3.8 liters) while gasoline prices added 1.87 cents to $2.4485 a gallon.
Natural gas futures rose 2.7 cents to $7.906 per 1,000 cubic feet.