Crude Oil Declines for a Third Day as Gasoline Futures Drop

Aug. 10 (Bloomberg) -- Crude oil fell for a third day as gasoline futures declined on signs of slowing seasonal demand for auto fuel late in the U.S. summer.

Oil fell from a five-week high of $72.84 a barrel on Aug. 7 after the dollar jumped the most in two months on a report showing U.S. employers eliminated fewer jobs than expected last month. Oil prices around $70 are “not bad” and necessary to maintain investment, OPEC President Botelho de Vasconcelos told reporters in the Angolan capital of Luanda yesterday.

“Oil’s looking a little bit vulnerable to some more downside in the first couple of days this week,” said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. The dollar’s rally “really undermines a lot of these commodities including oil,” he said.

Crude oil for September delivery fell as much as 61 cents, or 0.9 percent, to $70.32 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $70.53 at 7:34 a.m. in Singapore.

The contract fell 1.4 percent to $70.93 a barrel on Aug. 7, its lowest settlement in a week, as the dollar climbed and gasoline futures fell the most in seven sessions.

New York oil futures gained 88 percent the past six months as rising equity markets buoyed investor confidence, and the falling U.S. dollar made commodities more attractive. Prices reached an eight-month high of $73.38 a barrel on June 30.

While the decline in the U.S. unemployment rate to 9.4 percent was better than expected, it remains high “and that doesn’t bode well for demand at least in the short-term,” Hassall said. Seasonal motoring demand in the U.S. also seems to have been “fairly muted,” he said.

June Highs

“Oil looked like it was struggling on the charts as well up around the June highs,” he said. “I think that contributed to the selling pressure on Friday.”

Gasoline for September delivery dropped 0.8 percent to $1.9930 a gallon today after declining 2.6 percent to $2.0081 on Aug. 7, the lowest settlement since July 30.

U.S. gasoline demand usually peaks June through August. Total daily fuel use averaged 18.9 million barrels in the four weeks ended July 31, 3.1 percent less than a year earlier, the Energy Department said last week.

The U.S. currency was at $1.4187 to the euro in early Asian trading. It climbed 1.1 percent to $1.4183 on Aug. 7, its fourth straight gain and the biggest increase since June 15.

Brent crude oil for September settlement was untraded on London’s ICE Futures Europe exchange today. It fell $1.24, or 1.7 percent, to $73.59 a barrel on Aug. 7.