Oil hovers above $86 as Obama speech awaited

SINGAPORE — Oil prices hovered above $86 a barrel Wednesday in Asia amid hopes that President Barack Obama's major policy speech later this week will provide a catalyst for stronger U.S. economic growth.

Benchmark oil for October delivery was up 15 cents to $86.17 at midday Singapore time in electronic trading on the New York Mercantile Exchange. Crude fell 43 cents to settle at $86.02 on Tuesday.

In London, Brent crude for October delivery was up 10 cents at $112.99 on the ICE Futures exchange.

Crude has traded between $80 and $90 for the last month — down from near $115 in May — as investors worry a sluggish U.S. economy and high unemployment rate will stymie consumer demand. Obama is scheduled Thursday to announce new government measures to create jobs and spur economic growth.

Europe's debt crisis has also weighed on oil prices and stock markets. The Dow Jones industrial average fell 0.9 percent Tuesday.

“Investors have clearly become more concerned that the global economy may be sliding back to recession,” Citigroup said in a report. “We don't believe this will turn into a rerun of 2007-2008.”

In other Nymex trading for October contracts, heating oil added 1.3 cents at $3.02 per gallon and gasoline futures gained 0.5 cent at $2.83 per gallon. Natural gas for October delivery slid 0.3 cent to $3.93 per 1,000 cubic feet.