Investors sold futures after the U.S. House of Representatives approved a bill requiring the Commodity Futures Trading Commission to curb excessive market speculation. Household spending in Japan, the world's third-largest oil user, fell in May and the inflation rate doubled, showing that its longest postwar economic expansion may be ending.
Crude oil for August delivery was at $139.69 a barrel, up 5 cents, in after-hours trading on the New York Mercantile Exchange at 2:58 p.m. Singapore time. It earlier fell as much as $1.03, or 0.7 percent, to $138.61 a barrel.
Yesterday, oil rose $5.09, or 3.8 percent, to $139.64 a barrel, a record settlement price, as Libya threatened to cut output, OPEC's president said prices may reach $170 by the summer and the dollar weakened. Yesterday's all-time-high intraday price surpassed the $139.89 reached June 16.
Oil futures in New York have moved by 2 percent or more on half of the trading days this month. Prices veered 43.4 percent from the 30-day average yesterday, the highest volatility in 16 months, according to Bloomberg data. Volatility is a measure of how far the price of a commodity such as oil deviates from average closing prices over a prior period, such as 30 days.
Brent crude oil for August settlement was at $139.76 a barrel, down 7 cents, on London's ICE Futures Europe exchange at 2:59 p.m. Singapore time. It earlier fell as much as 84 cents, or 0.6 percent, to $138.99 a barrel.
The contract rose $5.50, or 4.1 percent, yesterday to settle at a record $139.83 a barrel. Prices touched $140.56 a barrel, the highest since trading began in 1988.
Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday. Investors buy commodities as a hedge against the dollar when inflation erodes the value of the U.S. currency.
The Fed left its benchmark at 2 percent, ending the most aggressive series of rate cuts in two decades. European Central Bank President Jean-Claude Trichet reiterated in a June 25 speech that policy makers may increase the main refinancing rate by a quarter-percentage point next month to contain inflation.
Oil also gained earlier yesterday after Libya, the holder of Africa's largest oil reserves, threatened to cut oil output in response to a U.S. law, passed in January, that allows terror victims to seize assets of foreign governments as compensation. The country produced 1.74 million barrels a day in May, slightly less than its capacity of 1.75 million barrels a day, according to Bloomberg estimates.