By Grant Smith and Yee Kai Pin Feb. 18 (Bloomberg) -- Crude oil fell for the first time in three days as the dollar strengthened and an industry report showed an increase in U.S. fuel supplies, fanning concern that demand in the world’s biggest energy user is slow to recover. Oil dropped from a four-week high as the U.S. currency extended gains against the euro, damping investor demand for commodities. The American Petroleum Institute said U.S. gasoline inventories rose last week to the highest since March 1999 and distillate fuel stockpiles ended a four-week drawdown. An Energy Department report today is forecast to show crude oil supplies increased, according to a Bloomberg News survey. “Demand in the U.S. is still really weak,” said Hannes Loacker, an analyst with Raiffeisen Zentralbank Oesterreich in Vienna. “Today’s figures will be a trigger for prices. You’d have to see a draw in crude stocks of around 3 million barrels to move prices substantially higher.” Crude oil for March delivery fell as much as $1.01, or 1.3 percent, to $76.32 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.66 at 11:45 a.m. London time. Yesterday, the contract rose 32 cents to $77.33, the highest settlement since Jan. 20. Futures have lost 3.4 percent this year. The dollar approached a nine-month high against the euro as signs of momentum in the U.S. economy added to speculation that the Federal Reserve will be one of the first major central banks to remove stimulus measures. The U.S. currency strengthened to $1.3566 per euro as of 11:45 a.m. in London from $1.3607 in New York yesterday. Gasoline Demand Falls “The global economy is still realistically weak,” said Peter McGuire, managing director at CWA Global Markets Pty in Sydney. “I don’t see a lot of issues in terms of supply constraints out there and demand is relatively weak.” Brent crude oil for April delivery fell as much as $1, or 1.3 percent, to $75.27 a barrel on the London-based ICE Futures Europe exchange. It was at $75.46 at 11:44 a.m. London time. Yesterday, the contract gained 0.8 percent to $76.27, the highest settlement since Jan. 20. U.S. gasoline consumption fell last week to the lowest level in 16 months as record winter snowstorms kept drivers off the roads from Texas to New England, according to MasterCard Inc., the second-largest credit-card company. Motorists bought an average 8.84 million barrels a day of gasoline in the week ended Feb. 12, MasterCard said yesterday in its SpendingPulse report. Demand was the lowest since October 2008, when supplies were limited by two Gulf Coast hurricanes and the U.S. economy was spiraling into the worst recession since the 1930s. Crude Supplies U.S. crude oil inventories slipped 63,000 barrels in the week to Feb. 12, according to yesterday’s API data. The Energy Department’s report today will probably show supplies rose 1.73 million barrels from 331.4 million previously, based on the median of estimates from 18 analysts surveyed by Bloomberg. The industry-funded API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that all inventory holders file reports with the Energy Department for its weekly survey. Distillate fuel inventories, including heating oil and diesel, are expected to have fallen 1.5 million barrels from 156.2 million the prior week, according to the Bloomberg survey. Gasoline stockpiles probably increased 1.5 million barrels from 230.4 million. In Germany, January sales of gasoil rose 8.5 percent from December to a 10-month high as cold weather boosted demand for the heating fuel, the country’s petroleum association said today. “We’re bound in a range between $70 and $80,” said Raiffeisen’s Loacker. “If a break above $80 happens it will be driven by sentiment, by higher stock markets and a weaker U.S. dollar.” The Department of Energy will put out its Weekly Petroleum Status Report at 11 a.m. in Washington, a day later than usual because of the Presidents’ Day holiday Feb. 15. To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

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