Oil prices dropped for a third day to less than $72 a barrel on concern China may cut back on industrial investment, slowing demand for fuels in the country, Bloomberg reported.

The oil price fell after China said it was studying curbs on overcapacity in industries including steel and cement.

Crude oil for October 2009 delivery declined as much as $0.40, or 0.6%, to $71.08 a barrel on the New York Mercantile Exchange and traded at $71.17 at 12.25pm Singapore time.

On 26 August the contract dropped $0.62, or 0.9%, to settle at $71.43. Futures have gained 60% this year.

Oil also traded lower as the dollar advanced against the euro for a fourth day, making commodities less attractive as alternative investments.

In the week beginning 17 August, US crude inventories increased 128,000 barrels, the Energy Department said.
Supplies were forecast to decline 1.15 million barrels, according to the median of 14 analyst estimates in a Bloomberg News survey.

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By GlobalData

Brent crude oil for October 2009 settlement declined as much as $0.53, or 0.7%, to $71.12 a barrel on the London-based ICE Futures Europe Exchange, and traded at $71.40 at 10.41am Singapore time.

On 26 August, the contract lost $0.17 to settle at $71.65.