Oil rises above $60 as traders eye US inventories

Crude oil prices in Asia rose more than $1 a barrel Wednesday, amid higher Asian equities and a weaker U.S. dollar.

An increase in oil prices despite a lack of positive fundamentals may be a sign that gains will be limited, said Ken Hasegawa, commodity derivative sales manager at Newedge Japan in Tokyo.

"The upside may also be limited; it depends on the short-covering," he added.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in August changed hands at $60.56 a barrel at 0702 GMT, $1.04 higher in the Globex electronic session.

The more actively traded September Brent crude contract on London's ICE Futures exchange was up 97 cents at $61.82 a barrel.

"It all comes down to bearish fundamentals competing with firming equities and a weakening dollar," said Peter Beutel, president of Cameron Hanover, in a note to subscribers, reports Wall Street Journal.

Weak gasoline demand in the U.S. has helped undermine investor optimism. U.S. motorists have pumped about 1 percent more gas this summer compared to 2008, but the amount remains significantly lower than in 2005 through 2007, according to the weekly SpendingPulse report by MasterCard released Tuesday.

Traders will be eyeing a weekly inventory report from the Energy Department's Energy Information Administration on Wednesday. Analysts expect the EIA's gasoline inventory numbers to rise 750,000 barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos, The Associated Press reports.