Oil hovers above $77 in Asia on demand hopes

Oil prices slipped Wednesday in Asia but held most of the gains from the previous day when economic reports suggested demand for crude could improve.

Benchmark crude for March delivery was down 17 cents at $77.06 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract jumped more than $2 on Tuesday.

The overnight rise in the oil price is the latest swing on the price seesaw over the past two months or so. Prices jumped about 20 percent from mid-December to a 15-month high last month only to slide more than 10 percent through the end of the month.

The latest boost came after the U.S. National Association of Realtors' index of sale contracts rose 1 percent in December, as buyers scrambled to take advantage of a first-time homebuyer tax credit before it was set to expire last November.

That suggested an improving U.S. economy which could translate into higher demand for oil products like gasoline.

Still, indicators that oil demand will improve have not panned out so far. Demand has continued to run well below the weak levels of a year ago.

In other Nymex trading in March contracts, heating oil fell 0.4 cent to $2.0276 a gallon, and gasoline was unchanged at $2.0186 a gallon. Natural gas fell 1.1 cent to $5.443 per 1,000 cubic feet.

In London, Brent crude was down 13 cents at $75.93 on the ICE futures exchange.