Oil falls to 7-week low as gasoline market flags

Crude fell for a fifth day and gasoline component RBOB tumbled to a 6-and-a-half month low, as the dollar strengthened and the end of U.S. summer holidays approached without triggering a seasonal stockpile drop.
U.S. crude for October delivery fell as much as 56 cents to $72.54 a barrel, the lowest price since July 7. It was down 33 cents at $72.77 by 0250 GMT. ICE Brent for October fell 35 cents to $73.27.
"The basic issue is just record-high inventory levels at the end of the gasoline season, when demand is going to be dropping," said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
"U.S. gasoline inventories have gone sideways during the peak driving season, when we should get a draw. We are pretty close to $72, which is support, but if we break through that we'll go to the 60s."
Prices of gasoline component RBOB for September delivery slumped to a fresh trough of 186.65 cents a gallon on Tuesday, the lowest intraday price since early February.
The dollar gained about 0.25% against a basket of currencies on Tuesday.
Crude inventories in the U.S. were forecast to have climbed 800,000 barrels last week, a Reuters survey showed, while stockpiles of distillates including heating oil and diesel may have advanced 1 mln barrels, in what would be their 13th consecutive weekly gain.
Gasoline stockpiles have increased during the northern hemisphere summer in 2009 and 2010, U.S. government data show, counter to normal seasonal patterns. And this year's gain has left supplies at the highest level for August since at least 2004.
The U.S. driving season, when holidaymakers take to the roads, sending demand for motor fuel to its annual peak, will finish with the Memorial Day long weekend in early September.