Crude oil fell for a third day on speculation slow economic recoveries in the US and Western Europe will weigh on global demand for fuels.
A report tomorrow in the US, the world's largest oil user, will probably show existing home sales fell to an eight-month low in February, based on a survey of economists. Oil, metals and stocks dropped and the dollar surged on March 19 after India unexpectedly raised interest rates and a Bank of England policy maker warned of risks of a ''double-dip recession'' in the UK.
India's move ''is raising some concern that the unwinding of stimulus measures might put a dent in overall global economic activity this year,'' said Toby Hassall, research analyst at CWA Global Markets in Sydney. ''It's going to either take some time or a string of pretty positive economic data to take us out of this range.''
Crude oil for April delivery fell as much as 59 cents, or 0.7 per cent, to $US80.09 a barrel in electronic after-hours trading on the New York Mercantile exchange. It was at $US80.10 at 9:51 a.m. in Sydney.
The contract, which expires today, dropped 1.9 per cent to $US80.68 on March 19, marking its second weekly decline. The more actively traded May contract fell 0.8 per cent to $US80.36 today.
Futures have gained 56 per cent the past year, and traded between $US69.50 and $US83.95 a barrel the past three months as US stockpiles increased and the rising dollar reduced the appeal of investing in commodities.
Recovery 'in place'
''The recovery story that really began a year ago is still in place, but the dollar rallying certainly presented a headwind for a lot of commodity prices,'' Hassall said. ''In the broad scheme of things, global oil consumption growth should turn positive this year for the first time in three years. So I think, maybe in the long-run, the bias in oil prices is upward.''
Hedge-fund managers and other large speculators increased their bets on rising oil prices for a sixth week, according to US Commodity Futures Trading Commission data.
Speculative net-long positions, the difference between orders to buy and sell oil, rose 14 per cent to 124,143 contracts in the week ended March 16, the commission said March 19.
Brent crude for May settlement fell 45 cents, or 0.6 per cent, to $US79.43 a barrel on the London-based ICE Futures Europe exchange. It dropped 2 per cent to $US79.88 on March 19.
