Oil fell for a second day

West Texas Intermediate crude fell for a second day after Libya reopened a terminal closed by protests, while Iranian President Hassan Rohani pledged in his inaugural speech to shun extremism and take a moderate approach.

Futures dropped as much as 1.2 percent as Libyan officials said the Marsa el Hrega port was operating and all oil fields in Libya’s western region returned to normal. Rohani took his oath of office yesterday, saying the U.S. and the European Union should end sanctions aimed at stopping Iran’s nuclear enrichment program, which have curbed its oil exports.

Oil advanced earlier after China’s non-manufacturing Purchasing Managers’ Index showed the first acceleration since March, according to government data on Aug. 3. The index rose to 54.1 in July from 53.9. The gain follows an unexpected increase in a factory index last week and may bolster confidence that Premier Li Keqiang’s policies are helping to prevent a deeper slowdown.

The U.S. and China are the world’s two biggest oil-consuming countries, accounting for about a third of global demand in 2012, according to BP Plc (BP/)’s Statistical Review of World Energy.

WTI crude for September delivery declined 30 cents, or 0.3 percent, to $106.64 a barrel at 10:42 a.m. on the New York Mercantile Exchange. Prices earlier climbed as much as 0.7 percent. The volume of all futures traded was 27 percent below the 100-day average. Futures increased 2.1 percent last week as Libyan exports were cut.

Brent oil for September settlement decreased 50 cents, or 0.5 percent, to $108.45 a barrel on the London-based ICE Futures Europe exchange. The European benchmark traded at a $1.81 premium to WTI, down from $2.01 on Aug. 2.