Oil pared gains, trading lower than $64 a barrel, on the assumption that optimism for a global economic recovery may be premature, Bloomberg has reported.

Crude oil for August 2009 delivery was at $63.80 a barrel, down $0.18, on the New York Mercantile Exchange at 11.37am Singapore time.

It earlier gained as much as $0.56, or 0.9%, to $64.54 a barrel. Oil has declined 13% from an eight-month high of $73.38 reached on 30 June.

China stock markets dropped from a 13-month high on concerns that this year’s rally may be overdone. According to a Bloomberg News survey US gasoline inventories are expected to have risen last week. That would be the sixth week of increases during what is typically the peak demand season for the fuel.

The contract of August 2009 expires on 21 July. The more active September 2009 contract dropped as much as $0.59, or 0.9%, to $64.70 a barrel.

On 20 July oil advanced along with the US stock market after a gauge of economic indicators increased in June 2009. The Shanghai Composite Index dropped 14.09, or 0.4%, to 3,252.83. In 2009 the gauge has surged 79%.

US crude oil stockpiles probably dropped for a tenth week out of 11, a Bloomberg News survey showed. The US inventories dropped 2.25 million barrels in the week ended 17 July according to the median of 12 estimates by analysts before an Energy Department report tomorrow.

Gasoline inventories probably raised 850,000 barrels from 214.6 million. Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1.5 million barrels from 159.3 million.

Gasoline for August 2009 delivery dropped as much as $0.94, or 0.5%, to $1.78 a gallon on the New York exchange. On 20 July it increased 1.95 cents, or 1.1%, to settle at $1.7894, the highest since 2 July.

Brent crude for September 2009 settlement dropped as much as $0.63, or 1%, to $65.81 a barrel on London’s ICE Futures Europe Exchange.