Oil slid from the highest close in more than two months as investors sold contracts on speculation that recent gains were excessive amid signs of weakening demand in the U.S, the world’s biggest consumer of crude.
Futures fell as much as 0.6 percent, dropping for the first time in four days. Oil’s gains stalled near the upper Bollinger Band, an indicator of technical resistance. Crude consumption declined 4 percent to 15.9 million barrels last week, the biggest percentage decrease in a month, data from the American Petroleum Institute showed. Gasoline usage was the lowest since February, according to the API figures.
“We’ll probably need to see further good news, further improvements in demand and the economic growth outlook for oil to move significantly higher,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “We have seen a strong rally off the bottom of a few weeks ago.”
Oil for September delivery decreased as much as 60 cents to $93.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.16 at 2:50 p.m. Singapore time. It climbed 1.6 percent yesterday to $93.67, the highest settlement since May 15. The contract has rebounded 20 percent from its low this year of $77.69 on June 28 and gained 5.8 percent so far in August. Prices are 5.7 percent lower since the start of the year.
Brent crude for September settlement fell 65 cents, or 0.6 percent, to $111.35 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was $18.20, down from $18.33 yesterday.