Oil fell for a third day as gasoline futures declined on the assumption of slowing seasonal demand for auto fuel late in the US summer.
Crude oil for September 2009 delivery dropped as much as $0.61, or 0.9%, to $70.32 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was traded at $70.75 at 10.37am in Singapore.
On 7 August, oil dropped from a five-week high of $72.84 a barrel as the dollar traded near a one-week high against the euro, eroding investor demand for commodities priced in the US currency.
Opec president Botelho de Vasconcelos said that oil prices of about $70 are necessary to maintain investment.
The contract dropped 1.4% to $70.93 a barrel on 7 August 2009, its lowest settlement in a week, as the dollar increased and gasoline futures dropped the most they have in seven sessions.
New York oil futures increased 88% in the past six months as increasing equity markets buoyed investor confidence and the falling US dollar made commodities more attractive. Prices reached an eight-month high of $73.38 a barrel on 30 June this year.
Brent crude oil for September 2009 settlement dropped as much as $0.39, or 0.5%, to $73.20 a barrel on London’s ICE Futures Europe exchange, and traded at $73.57 at 10.18am Singapore time.
The dollar traded at $1.42 per euro as of 10.21am in Tokyo from $1.4183 in New York on 7 August when it increased to $1.4155, the highest level since 31 July.
The US Energy Department said that daily fuel use averaged 18.9 million barrels in the four weeks ended 31 July, 3.1% less than a year earlier.
If storms and hurricanes strike the Gulf of Mexico, production may be shut down and tanker traffic delayed. The North Atlantic hurricane season runs from June through November.