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Crude oil falls amid non-oil concerns

27 August 2009 08:08 (UTC +04:00)

Baku-Rzayev â€“ APA-Economics. Crude oil fell for a second day as the dollar strengthened, undermining demand for assets used to hedge against inflation, Bloomberg reports.

Oil dropped 0.9 percent as the dollar advanced on a report by the Xinhua News Agency that China is studying curbs on industrial overcapacity, increasing concern the global economic recovery will slow. Oil also declined after an unexpected gain in crude inventories.

Crude oil for October delivery fell 62 cents, or 0.9 percent, to settle at $71.43 a barrel at 2:46 p.m. on the New York Mercantile Exchange. It was the lowest closing price since Aug. 18. Futures have gained 60 percent this year.

Brent crude oil for October settlement lost 17 cents to $71.65 a barrel on the London-based ICE Futures Europe exchange.

The U.S. currency gained 0.4 percent, to $1.4242 per euro at 3:01 p.m. in New York, from $1.4296 yesterday. It was the dollarâ€™s third consecutive increase.

Inventories of crude oil rose 128,000 barrels last week to 343.8 million, the Energy Department said today in a report. Supplies were forecast to drop by 1.15 million barrels, according to the median of 14 analyst estimates in a Bloomberg News survey.

The American Petroleum Institute reported yesterday that oil supplies climbed 1.3 percent, the most since April, to 346.7 million barrels.

Crude oil is set to decline to $70 a barrel or less after encountering resistance at this yearâ€™s high of $75 a barrel, according to technical analysis by Newedge USA LLC and Commerzbank AG.