By Gavin Evans and Christian Schmollinger

Oct. 8 (Bloomberg) — Crude oil traded near $81 a barrel after falling last week as U.S. stockpiles increased and the rising dollar reduced the attraction of physical assets for investors.

U.S. crude oil inventories climbed for a second week to 321.8 million barrels on Sept. 28, the Energy Department reported last week, as refiners shut units for pre-winter maintenance. Oil fell Oct. 5 after a report showing stronger- than-expected September jobs growth in the U.S. pushed the euro to a two-week low against the dollar.

“Eighty dollars certainly is an important litmus test” for the market, said Christopher Edmonds, an analyst at FIG Partners Energy Research & Capital Group, in Atlanta. “We’re still facing very tight markets both here in the United States and globally” and that should maintain prices above $75, he said.

Crude oil for November delivery was at $80.90 a barrel, down 32 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:39 a.m. in Singapore.

The contract fell 22 cents, or 0.3 percent, to $81.22 on Oct. 5, taking its decline for the week to 0.5 percent. Oil reached a record $83.90 a barrel on Sept. 20 and has fallen five of the past six sessions.

Hedge-fund managers and other large speculators reduced their bets on rising prices for the first time in five weeks, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, fell 1.7 percent to 239,250 contracts on Oct. 2. Short positions, or bets that prices will fall, fell 8.6 percent to 182,780 contracts, increasing the net-long position by 30 percent to 56,470 contracts, the Washington-based commission said Oct. 5.

That change in holdings may reflect a “seasonal rounding out of positions” FIG’s Edmonds said, and he cautioned against reading too much into one week’s data. Still, any further decline in short positions will tend to support prices, he said.

Brent crude oil for November settlement fell 25 cents, or 0.3 percent, to $78.65 a barrel on the London-based ICE Futures Europe exchange at 9:39 a.m. Singapore time.

To contact the reporters on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net ; Christian Schmollinger in Singapore at christian.s@bloomberg.net .

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