US light crude oil trading near a one week low

Crude oil traded near a one week low after gasoline futures declined on signs of slowing seasonal demand for auto fuel late in the US summer.

Oil had fallen from a five-week intraday high of $72.84 a barrel on Aug. 7 as the dollar is near a one-week high against the euro, eroding investor demand for commodities priced in the US currency. Crude prices around $70 are “not bad” and are necessary to maintain investment, OPEC President Botelho de Vasconcelos told reporters in Angola yesterday.

“Oil’s looking a little bit vulnerable to some more downside in the first couple of days this week,” said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. The dollar’s rally “really undermines a lot of these commodities including oil,” he said.

Crude oil for September delivery was at $71.08 a barrel, up 15 cents, in after-hours electronic trading on the New York Mercantile Exchange at 1:12 p.m. in Singapore. The contract declined 1.4 percent to $70.93 a barrel on Aug. 7, its lowest settlement in a week, as the dollar climbed and gasoline futures fell the most in seven sessions. Futures closed at $70.93 on Aug. 7, the lowest settlement since July 31.

New York oil futures gained 89 percent the past six months as rising equity markets buoyed investor confidence, and the falling US dollar made commodities more attractive. Crude oil prices reached an eight-month high of $73.38 a barrel on June 30.