Crude oil hangs out near $98 per barrel

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NEW YORK, July 18 (UPI) -- Crude oil prices held above $89 per barrel Wednesday morning with support from economic data from China offsetting a grim assessment of the U.S. recovery.

August delivery West Texas Intermediate crude oil gained 21 cents to $89.43 per barrel on encouraging housing market news from China a day after Federal Reserve Chairman Ben Bernanke told the Senate Banking Committee the economic recovery faced strong headwinds and increased risk due to the debt crisis in Europe and budget issues in Washington.

Traders expect a modest drop in U.S. inventories in an afternoon report by the Energy Information Administration, which would allow stockpiles to remain above their five-year average.

Heating oil on the New York Mercantile Exchange added 0.98 cents to $2.852 per gallon. Natural gas gained 6.9 cents to $2.865 per million British thermal units while reformulated blendstock gasoline gained 1.93 cents to $2.7542 per gallon.

At the pump, the national average price of unleaded gasoline added 2 cents overnight to $3.426 per gallon, AAA said.