Oil declined as investors sold contracts against a strengthening dollar and the Chinese economy grew at the slowest pace in a year, stoking concern that demand in the world’s biggest energy consumer will weaken. Futures dropped as the U.S. currency rose against most of its counterparts, limiting the appeal of commodities as an inflation hedge. China’s economy grew 9.6 percent in the third quarter, according to government data. U.S. gasoline stockpiles increased unexpectedly last week, a report showed yesterday. “Inventories of crude and products are still high so there is no fear of a global shortage,” Ken Hasegawa, a commodity derivative sales manager at broker Newedge in Tokyo, said in an interview. “The currency markets are key for every market at the moment.” The December contract lost as much as 67 cents, or 0.8 percent, to $81.87 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.09 at 2:50 p.m. Singapore time. Yesterday it advanced $2.38 to $82.54 a barrel. Crude for November delivery surged $2.28 to close yesterday at $81.77, the biggest gain in 11 weeks. Prices are up 3.5 percent this year. The increase in China’s gross domestic product from a year earlier compared with economists’ median estimate of 9.5 percent. Economic growth was 10.3 percent in the second quarter and 11.9 percent in the first three months of the year. China’s monthly crude oil processing volume increased the least in 18 months in September, according to faxed data from China Mainland Marketing Research Co. Refineries in the world’s biggest energy user processed 34.9 million metric tons of crude last month, or about 8.5 million barrels a day. That’s up 6.6 percent from a year ago, the smallest year-on-year gain since March 2009. The dollar climbed after the Wall Street Journal reported U.S. Treasury Secretary Timothy F. Geithner as saying the major currencies are “roughly in alignment,” suggesting there’s no need for further weakness in the dollar. Trading Range The greenback increased as much as 0.7 percent to $1.3872 per euro, after falling 1.7 percent yesterday. It was at $1.3950 at 2:58 p.m. in Singapore. China’s GDP numbers met with the market’s expectations, according to Newedge’s Hasegawa. Oil may trade in a range of $80 to $84 barrels “for some time,” he said. An Energy Department report yesterday showed U.S. inventories of gasoline rose 1.12 million barrels last week. They were forecast to fall 1.5 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey. Crude supplies climbed 667,000 barrels to 361.2 million. Stockpiles are at their highest level in the past 10 years for this time of year. Brent crude for December settlement dropped as much as 60 cents, or 0.7 percent, to $83 a barrel on the London-based ICE Futures Europe exchange. Yesterday it gained $2.50, or 3.1 percent, to $83.60. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Christian Schmollinger in Singapore at christian.s@bloomberg.net To contact the editor responsible for this story: Clyde Russell in Singapore at crussell7@bloomberg.net

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