Crude Holds At $US140

Crude oil rose for a third day in New York on speculation further weakness in the US dollar will sustain investor demand for the commodity.

A report tomorrow may show manufacturing in the US, the world's largest oil consumer, contracted for a fifth month in June. Declines in the dollar and political tension in the Middle East may push oil to $US170 a barrel by the end of the year, OPEC President Chakib Khelil said June 28.

Crude oil for August delivery rose as much as 75 cents, or 0.5%, to $US140.96 in after-hours electronic trading on the New York Mercantile Exchange. It was at $US140.90 at 8.13am in Sydney.

The contract reached a record $US142.99 a barrel on June 27 before settling at $US140.06, a gain of 0.3% on the day. Prices rose 4.2% last week as the Federal Reserve left interest rates unchanged and showed no signs it will support the dollar any time soon.

Hedge fund managers and other large speculators almost doubled their bets on rising prices in the week ended June 24, according to US Commodity Futures Trading commission data.

Net-long positions in New York oil contracts, the difference between contracts to buy and sell the commodity, gained 90.5% to 24,217 contracts. Long positions rose from a five-month low a week earlier while contracts to sell oil fell a second week to a two-month low.

Brent crude oil for August settlement rose 21 cents to $US140.04 a barrel on London's ICE Futures Europe exchange on June 27. Prices earlier climbed to $US142.97, the highest since trading began in 1988.