Sept. 18 (Bloomberg) -- Crude oil fell for a second day as the dollar strengthened against the euro, dimming investors’ demand for dollar-priced assets to hedge against inflation. Oil dropped as much as 1.7 percent as the U.S. currency climbed for the first time in five days. Futures are heading for a 3.4 percent increase this week, a second straight weekly gain, after data showed an expansion in U.S. housing starts and industrial capacity utilization. “The rally in energy is looking a little long in the tooth,” said John Kilduff, senior vice president of energy at MF Global in New York. “There isn’t any economic data to give the market any strength. The dollar is a bit stronger today, which is weighing on things.” Crude oil for October delivery fell 80 cents, or 1.1 percent, to $71.67 a barrel at 10:17 a.m. on the New York Mercantile Exchange. Prices have risen 61 percent this year. The dollar traded at $1.4687 per euro from $1.4741 yesterday. It reached $1.4767 yesterday, the weakest level since Sept. 25, 2008. Brent crude oil for November settlement declined 65 cents, or 0.9 percent, to $70.90 a barrel on the London-based ICE Futures Europe exchange. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

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