Crude Oil Drops to $61.50 a Barrel

16 July 2009 (Last Updated July 16th, 2009 18:30)

Crude oil has declined in New York, reversing two days of gains, as the US dollar increased against the euro, limiting the appeal of commodities as an investment, Bloomberg reported. Crude oil for August 2009 delivery dropped as much as 51 cents, or 0.8% to $61.51 a barrel on the

Crude oil has declined in New York, reversing two days of gains, as the US dollar increased against the euro, limiting the appeal of commodities as an investment, Bloomberg reported.

Crude oil for August 2009 delivery dropped as much as 51 cents, or 0.8% to $61.51 a barrel on the New York Mercantile Exchange.

The dollar increased after investors sought safer assets following two explosions at hotels in the Indonesian capital of Jakarta.

The American Petroleum Institute (API) said fuel demand in the US dropped in the first six months of the year to an 11-year low as the global recession curbed shipping and air traffic.

Crude is up 3%, set for its first weekly gain since 12 June.

Investors sought safer assets following the explosions including the dollar and the yen. The Japanese currency increased to 132.04 a euro as of 11.10am in Tokyo from 132.89 yesterday in New York.

The API reported deliveries of petroleum products dropped 5.8% to an average 18.7 million barrels a day from January 2009 through June 2009. Demand is down 9.6% from a record 20.75 million barrels a day reached in the first half of 2005.

The US Energy Department report showed that the inventories of gasoline increased 1.44 million barrels to 214.6 million. Supplies were forecast to increase 875,000 barrels.

Gasoline for August 2009 delivery fell 0.82 cent, or 0.5%, to $1.7053 a gallon on the New York Mercantile Exchange at 10.34am Singapore time. On 16 July increased 0.54 cent, or 0.3%, to end the session at $1.7135.

Brent crude for September 2009 settlement dropped as much as 54 cents, or 0.9%, to $63.21 a barrel on London’s ICE Futures Europe Exchange. It was $63.28 a barrel at 10.42am Singapore time. The contract gained 23 cents, or 0.4%, to settle at $63.75 a barrel on 16 July.