SF: Crude Oil Falls to Three-Day Low as Equities Drop, Dollar Gains
Sept. 7 (Bloomberg) -- Oil declined to a three-day low as falling equity markets reinforced doubts about the global economic recovery while the end of the U.S. summer peak consumption season signaled lower demand from refiners.
Yesterday's U.S. Labor Day holiday marked the end of the driving season. Refiners often idle processing units for maintenance in September and October as gasoline demand drops and before heating-oil use increases. The Stoxx Europe 600 Index fell 0.6 percent and the dollar strengthened against the euro, reducing the investment appeal of commodities.
"Equities are weaker and the dollar is stronger, so for the next few days we're likely to move in a $70-$75 range," Frank Schallenberger, head of commodities research at Landesbank Baden-Wuerttemberg, said from Stuttgart.
Crude for October delivery dropped as much as $1.74, or 2.3 percent, to $72.86 a barrel in electronic trading on the New York Mercantile Exchange and was at $72.9 at 11:18 a.m. London time. Yesterday's transactions will be booked with today's trades for settlement purposes, as there was no floor trading on Labor Day. Brent crude for October settlement declined $1.17, or 1.5 percent, to $75.70 a barrel on the ICE Futures Europe Exchange in London.
The dollar gained for a second day against the 16-nation euro, trading at $1.2745 to the European currency, compared with $1.2876 yesterday in New York.
Rising crude oil inventories in the U.S., the world's biggest oil consumer, are also weighing on petroleum prices, Schallenberger said. U.S. stockpiles of crude are currently about 5 percent higher than a year ago.
