Oil steady after plunging more than $6

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Concern that quickening inflation and slowing economic growth will cut consumer demand in the U.S. for gasoline and other oil products may slow a bullish trend that's seen crude prices roughly double in the past year, said Tetsu Emori, a commodity markets fund manager at ASTMAX Futures Co. in Tokyo.

"The market is eyeing the weaker economy and the weaker demand out of the U.S.," Emori said. "The price uptrend is still ongoing, but without a news catalyst, there isn't as much confidence that we'll break $150 in the short-term."

Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that "numerous difficulties" are racking the U.S. economy, and warned that rising prices for energy and food are elevating the risks of inflation.

At the same time, the Labor Department reported that wholesale inflation jumped by 1.8 percent last month, a larger-than-expected gain. Over the past year, wholesale prices have risen 9.2 percent, the most since 1981.

In midday trading in Singapore, light, sweet crude for August delivery were down 10 cents at $138.64 a barrel in electronic trading on the New York Mercantile Exchange.

Crude plunged $6.44, or 4.4 percent, Tuesday in New York to settle at $138.74 a barrel in an extremely volatile session. Over the course of the session, the contract rose as high as $146.73 and fell as low as $135.92.

Prices hit a trading record of $147.27 on Friday.

The latest monthly market report from the Organization of Petroleum Exporting Countries gave traders further reason to unload oil this week.

The cartel predicted world oil demand will rise by 900,000 barrels a day in 2009, or 100,000 barrels per day less than this year. OPEC blamed the slowdown in growth on slumping economies and high pump prices in rich, industrialized countries.

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