Oil falls to near $71 in Asia amid weak demand

       Oil prices fell to near $71 a barrel yesterday in Asia as high crude stockpiles and weak demand tempered enthusiasm about recent signs of improvement in the world's largest economy.
       Benchmark crude for October delivery was down 88 cents at $71.16 a barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gave up 43 cents Friday to settle at $72.04 a barrel.
       The recession has sapped American fuel consumption, and US oil stockpiles are 14% larger than last year even as recent data suggests the economy is clawing out of recession.
       The Energy Information Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.
       "Most of the macro data from the US over the last month has been suppor-tive of oil prices," said David Moore,commodity strategist at Commonwealth Bank of Australia in Sydney. "But inventories remain high and demand is weak, so that's capping prices.'
       Moore said crude will likely average $64 a barrel in the fourth quarter before rising to average $80 in the October to December period of 2010.
       In other Nymex trading, gasoline for October delivery slipped 1.58 cents to $1.8166 a gallon, and heating oil fell 1.74 cents to $1.8105 a gallon. Natural gas fell 5.0 cents to $3.728 per 1,000 cubic feet.
       In London, Brent crude fell $1.07 to $70.27 on the ICE Futures exchange.
       "Oil is stalling ahead of the fourth quar ter and we expect a gradual pick-up in volatility at the ver y end of September," said VTB Capital analyst Andrey Kryuchenkov.
       "We still believe that the upside is capped at the moment and we do not expect significant gains until October.'
       Crude oil fell on Friday, under pressure from a slightly stronger dollar and as many traders chose to take profits.
       The dollar's small appreciation also weighed on dollar-priced oil, making it more expensive for buyers using other currencies.
       "The petroleum complex was softer on Friday as the US dollar mounted a comeback," analysts at John Hall Associates wrote in a note to clients.
       The dollar's overall weakening trend _it sank to a near-year low against the euro last week _has been price-supportive of oil and other commodities.
       Oil also won support last week from weekly official data showing a large decrease in US crude reserves.
       The decline was seen as an indication that US oil demand was improving but some analysts cautioned that its stockpiles remained huge and pr ices had not returned to June highs.