Aug. 30 (Bloomberg) -- Oil fell from near its highest in three weeks in London on speculation that crude stockpiles are increasing in the U.S., the biggest consumer of the commodity.
Futures reversed earlier gains as the dollar strengthened, dimishing the appeal for assets used to protect against inflation, such as crude. An Energy Department report tomorrow may show U.S. crude inventories climbed 875,000 barrels last week. The industry-funded American Petroleum Institute will release its own data later today.
“I don’t see a lasting rally, given the ongoing risks for the world economy,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. The bank was the third most- accurate forecaster of oil prices in the second quarter. “It’s only soft factors like rising stock markets and returning risk appetite that’s supporting prices.”
Brent oil for October settlement fell as much as 46 cents, or 0.4 percent, to $111.42 a barrel on the London-based ICE Futures Europe exchange and was at $111.47 as of 10:20 a.m. London time. The contract yesterday rose to $112.73, the hgihest prices since Aug. 4.
Crude for October delivery on the New York Mercantile Exchange was at $86.75 a barrel, down 52 cents. The contract yesterday climbed $1.90, or 2.2 percent, to $87.27, the highest settlement since Aug. 17.
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