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Crude oil declined for the first time in three days as optimism faded that China’s plan to add more flexibility in the yuan’s fixed exchange rate would strengthen the global economic recovery.
Oil gave up yesterday’s gains as equities fell on renewed concern that Europe’s sovereign-debt crisis will affect economic recovery. Goldman Sachs Group Inc. reduced its crude price forecasts today. The People’s Bank of China said June 19 it’s increasing the flexibility for the yuan, marking an end to the crisis policy of pegging the currency to the dollar.
“Traders realized that whatever the Chinese will do regarding the yuan will be gradual and so the likely impact on immediately boosting Chinese demand for oil will be modest,” said Victor Shum, a senior principal with energy consultants Purvin & Gertz Inc. in Singapore. “The European debt crisis, the fragile recovery of the U.S. economy — those things still prompt investors to lock in profits when oil prices gain.”
Crude for July delivery dropped as much as 85 cents, or 1.1 percent, to $76.97 a barrel in electronic trading on the New York Mercantile Exchange, and was at $77.06 at 1:45 p.m. Singapore time. Yesterday, oil rose 64 cents, or 0.8 percent, to settle at $77.82. The contract expires today.
The more-actively traded August contract declined as much as 85 cents, or 1.1 percent, to $77.76 a barrel, and was at $77.86 a barrel. Futures have dropped 2.9 percent this year.
China, the world’s most-populous nation, consumes more oil than any country except the U.S. China’s central bank said there’s no basis for “large-scale” moves in its currency even as it pledged increased exchange-rate flexibility.
Brent Crude
Brent crude for August settlement declined as much as 84 cents, or 1.1 percent, to $77.98 a barrel on the ICE Futures Europe exchange in London, and was at $78.10 at 1:46 p.m. Singapore time. Yesterday, the contract advanced 60 cents, or 0.8 percent, to settle at $78.82.
Asian stocks fell for the first time in nine days after Fitch Ratings downgraded Paris-based BNP Paribas SA and Standard & Poor’s Ratings Services said Spanish lenders face difficult years because of the nation’s slow growth. The MSCI Asia Pacific Index fell 0.7 percent to 118.28 at 2:12 p.m. in Tokyo.
The S&P 500 lost 0.4 percent to 1,113.20 as of 4 p.m. in New York, wiping out an earlier advance of 1.2 percent. The Dow Jones Industrial Average decreased 8.23 points, or 0.1 percent, to 10,442.41.
“It was a pretty significant reversal for the U.S. equity markets, which feeds through to oil market sentiment,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney. China’s decision to end the yuan’s peg “is a double- edged sword. It’s going to negatively affect U.S. importers, those importing Chinese goods, but at the same time it can be seen as a positive to those exporting to China,” he said.
U.S. Inventories
Goldman Sachs Group Inc. cut its price forecasts for crude oil because commodity markets are “fragile” on concern growth in Europe and China will slow, the bank said in a report today.
“Commodity markets are generally rebounding strongly off their lows but sentiment remains fragile on European and Chinese concerns,” said analysts led by New York-based Allison Nathan.
West Texas Intermediate oil was forecast at $87 a barrel for a three-month period, down 9.4 percent from a $96 prediction Goldman Sachs made in a May 10 report. It also downgraded estimates for six-month and 12-month crude and for Brent oil.
Oil prices at the top end of the $70-to-$80 a barrel range are “a little high” at the beginning of the summer driving season in the U.S., said Purvin’s Shum. Gasoline consumption peaks from the Memorial Day weekend in late May to Labor Day in early September.
“When we go deeper into summer, if indeed there is strong demand growth for gasoline in the U.S., then there will be more reason for oil pricing to get to the top end of the $70-$80 range,” Shum said.

One poor start by Burnett was a blip, two were an anomaly and three were a disturbing trend. Four in a row, then, is a downright problem, and the Yankees now have to solve a pressing identity crisis: Who replaced the confident strike-thrower that thrived in April with the erratic guy who has a 10.35 earned run average this month? In 20 innings, Burnett has surrendered nine homers, and his overall earned run average has soared to 4.83 from 3.28.
Recently, he has been bothered by a bruised right foot, sustained when he was drilled by a grounder during his last start, but Burnett said it felt better heading into Monday’s game. Over all, his struggles have coincided with the absence of the pitching coach Dave Eiland, who began an indefinite leave of absence for personal reasons on June 4, the day of Burnett’s first start this month. All nine hits that Burnett allowed came with two outs, and the first six runs scored on rallies that began with two outs and no one on base.
The Yankees might have had a better chance at overcoming that six-run deficit if a Cy Young Award winner had been pitching for the Diamondbacks. After toppling two Cy Young winners, Roy Halladay and Johan Santana, within a six-day span, the Yankees managed only three runs and had eight hits in eight innings against Rodrigo Lopez, who entered Monday at 2-6. Their lone extended rally produced two runs in the sixth, and Lopez foiled a potential comeback by retiring Mark Teixeira with runners on the corners to end the seventh. Brett Gardner was a bright spot, going 4 for 4 with two runs scored.
Burnett’s latest misery came on the same day that Manager Joe Girardi announced a significant, if temporary, change in the rotation. In keeping with their plans to restrict Phil Hughes’s innings, the Yankees will skip his scheduled start Friday in Los Angeles to give him three more starts before the All-Star break instead of four. His next start will come June 29 at Yankee Stadium against Seattle. By pitching so well, by logging so many innings, Hughes has accelerated their preservation plan. He has exceeded their expectations, going 10-1 with a 3.17 E.R.A, while pitching 82 1/3 innings across 13 starts — an average of six and a third innings per start. If he were to continue on that pace without extra rest, Hughes would demolish his professional season high of 146 in 2006.
“This is a hard guy to sit and miss a start, just because of how well he’s pitching for us,” Manager Joe Girardi said. “We can’t be short-sighted. We have to think of this year, and we also have to think of his future and not hurt this kid. Starters are not easy to develop, and it takes time. We want to make sure that we have him for a long time.”
The Diamondbacks, at 28-43 and mired in last place in the National League West, do few things well. Hitting home runs is one of them, though, and Justin Upton began the barrage with a mammoth shot onto the concourse in center field. Two singles followed, and Adam LaRoche crushed a first-pitch fastball over the swimming pool in right field. Burnett’s fastball has not been sharp lately, but then again, neither has his curve. One hung for the next batter, Mark Reynolds, and he pummeled it over the left-field fence. As each homer cleared the wall, Burnett just stood on the mound, dumbfounded. He threw 35 pitches that inning, and 17 more in the second, when Miguel Montero’s two-out double knocked in Upton.
A crowd of 47,229, the largest since opening day, packed Chase Field for a rematch of the 2001 World Series, not that anyone inside was thinking back nine years or anything. Certainly not three players from the Diamondbacks’ championship team — Luis Gonzalez, Matt Williams and Mark Grace — who were asked to throw out the ceremonial first pitch. Or the fans who hooted when the video screen showed Gonzalez’s series-deciding broken-bat blooper in Game 7. Trying to drown them out, the Yankees fans let loose a long boo. They had practice with that reaction Monday night, when one of their own — Burnett — was the target.
INSIDE PITCH
The Yankees felt comfortable enough in JORGE POSADA’s ability to assume the bulk of the catching duties this trip that they dropped their third catcher, CHAD MOELLER. Their hope is that Posada, recovering from a fractured right foot, can catch four of the six games. He started Monday night. Replacing Moeller was COLIN CURTIS, a left-handed-hitting outfielder. He made his major league debut as a pinch-hitter in the fourth and flew out … JESUS MONTERO and AUSTIN ROMINE are the Yankees’ most advanced catching prospects, but they have another, GARY SANCHEZ, whom they like just as much. In his second professional at-bat, Sanchez, 17, hit a grand slam Monday for the Yankees’ rookie-level team in the Gulf Coast League.

Eight innings at the Coliseum on Monday night went quietly as the Reds and A’s managed a run apiece. Each team produced a run in the ninth to send the game to extra innings at 2-2.
Ah, then came the 10th. Nothing quiet about three homers in an inning.
Long balls by former Oakland catcher Ramon Hernandez, Joey Votto and Scott Rolen propelled Cincinnati to a 6-4 victory.
Hernandez led off the 10th by taking Michael Wuertz off the left-field foul pole. With one out and a man aboard, Votto greeted Cedrick Bowers with a bolt to left-center for a 5-2 game.
That was Votto’s 15th homer of the season. Rolen followed Votto with his 15th of the season, and Cincinnati owned a four-run edge.
Wuertz (2-1) would take the loss, ending his personal winning streak at seven games. He had not collected an “L” since May of last year.
The first three A’s hitters reached base in the bottom of the 10th. Groundouts by Ryan Sweeney and Kevin Kouzmanoff each brought home a run.
Jordan Smith, the Reds’ third pitcher of the inning, struck out Jack Cust to end the proceedings. Smith picked up his first major-league save.
In the ninth, pinch-hitter Jay Bruce’s two-out, RBI single off Andrew Bailey put the Reds up 2-1.
That lead lasted about as long as it takes public-address announcer Dick Callahan to say Kouzmanoff’s name.
The Oakland third baseman led off the bottom of the ninth by driving the first pitch from Francisco Cordero the opposite way. The ball had just enough carry to clear the fence in the right-field corner.
Kouzmanoff’s eighth homer of the season got the A’s even. He went 2-for-5 and is 33-for-79 (.418) in June. Oakland, though, is 6-14 this month.
Besides Kouzmanoff, the A’s other encouraging sign Monday night was the performance of starter Gio Gonzalez.
The left-hander took losses in each of his previous two starts, against the Giants and Cubs, but his line Monday: seven innings, four hits, one unearned run, one walk and nine strikeouts.
The K’s were one shy of his career high, set against the Angels on Oct. 2.
“Just trusting my stuff, building my confidence back up,” Gonzalez said, “and just believing I could throw my curveball for a strike.”
Manager Bob Geren called it “a real good swing-and-miss curveball.”
Reds manager Dusty Baker got another solid outing from rookie right-hander Mike Leake. Cincinnati took Leake with the eighth overall pick in last year’s draft. Leake, who went to Arizona State, did not pitch an inning in the minors.
Leake worked six innings, allowing one run on five hits. He walked four and struck out two.
Before the game, Baker talked about how Leake (5-1, 2.92 ERA) has been able to thrive without a minor-league education.
“He knows how to make adjustments,” Baker said. “The guy studies. He pays attention.”
Baker, who managed the Giants for 10 seasons (1993-2002), earned career win No. 1,352, tying him with Chuck Tanner for 26th place.

As Spain (second) and Switzerland (third) are only on three points after a loss and win apiece, there is still a slight chance for Honduras to advance to the second round if they produces a big win over the Swiss and Spain go down to Chile.
But Rueda is worldly enough to know such results are unlikely and has called on his players to produce their best for the simplest of reasons.
“(We want) to end on a high for the good of Honduran football,” Rueda said.
“We’ll now have to see if the players can bounce back mentally and go out and give their all.
“We had two or three chances but we weren’t clinical enough to score,” he added.
“I’m expecting another difficult game against Switzerland, although it will be very different to the one today.”
Honduras produced a few nervy moments for a Spanish defence, still smarting from a shock 1-0 loss to Switzerland in the Group H opener.
The Europeans had already missed a number of chances before a deflected Walter Martinez cross threatened the Spanish goal, forcing stopper Iker Casillas into an unusual clearance with his knees.
But any resistance was soon snuffed out as a sensational solo effort from striker David Villa saw Spain open their account in South Africa.
Villa scored again in the second half, but should have had a hat-trick as he missed a penalty late in the encounter, the Spaniards laying siege to the Honduran goal after the break.
“We went down fighting,” declared defender Osman Chavez.
“We came up against a great national side and I think that we did pretty well. It’s no mean feat to make a team of their calibre sweat.
“So, even though we lost, I think we’ve got something to be pleased about.
“We’re not totally down and out … (so) we’re going to keep working right until the end to try and make it through.”

Panjiva, a company that tracks international trade, has calculated that the Pixar picture has moved more merchandise than any other recent movie — and that it’s not a terribly close contest.
Toys, furniture, scooters, calculators and other such stuff emblazoned with images from the $110 million weekend champ Disney/Pixar’s latest hit was packed into 724 massive cargo containers shipped to the U.S., according to Panjiva.
Panjiva looked at the 40 biggest films from the past 18 months, then checked incoming shipments of merchandise related to those titles using the official bills of lading. That means items manufactured in the U.S. are not counted, including 12 million McDonald’s restaurant drinking glasses promoting “Shrek Forever After,” though they were recalled anyway.
The majority of movie-related merchandise comes from China , said Panjiva CEO Josh Green. Besides the Shrek glassware, a notable exception was “Iron Man 2” bed sheets that came from Pakistan . “Iron Man 2,” in fact, was second to “Toy Story 3” in the merchandising contest, scoring 474 shipped containers.
Proving there’s not necessarily a correlation between volume of merchandise and box office performance, “G.I. Joe: The Rise of the Cobra” was third with 403 shipments, even though the movie grossed a disappointing $150 million domestically. And after that is “The Princess and the Frog” with 321 shipments and $103 million at the domestic box office.

Fox said in a statement Monday that the age eligibility to audition for the upcoming 10th season of the singing competition would be lowered from 16 to 15 years old. The maximum age to audition remains 28.
“American Idol” executive producer Cecile Frot-Coutaz said in a statement that “a lot of young, talented people are now seeking careers and representation before they turn 16.”
Auditions for the next season will begin July 17 in Nashville, Tenn. Other audition cities include Milwaukee, New Orleans, San Francisco, East Rutherford, N.J., and Austin, Texas.

If Miley Cyrus’s career can be measured in Britney Years, she is now in Phase Two, after the teasing but wholesome debut but before The Era Of K-Fed. With her adolescence and starmaking vehicle “Hannah Montana” both coming to an end, the 17-year-old Cyrus must ready herself for adulthood, and “Can’t Be Tamed,” her third solo disc, is the declaration of independence that years of “Behind the Music” specials have taught us it must be.
For Grown-Up Miley to live, Teen Pop Miley must die, and her/its demise is explicitly detailed in “Robot,” Cyrus’s lament about the existential misery of life as a Disney-bot: “I need to breathe/I’m not your robot/Stop telling me I’m part of this big machine/I’m breaking free,” she informs her captors.
Free to do what, Cyrus doesn’t say, but like any female pop singer from 15 to 45, it must necessarily involve Lady Gaga: “Tamed” has been so thoroughly Gaga-fied, so faux electro-disco-fied, Cyrus seems to have merely traded one overlord for another.
She sounds better singing semi-stripped-down untrendy pop songs such as “The Climb,” which, whatever their studio sweetening, don’t rely on robot noises for their kick. But “Tamed” has little interest in deft little lighter ballads, nor in any real expression of Cyrus’s personality. Cyrus has always seemed real-ish, as if underneath the sparkly headbands she was really a cranky 40-year-old cocktail waitress who smoked. But “Tamed” doesn’t take advantage of her vinegary personality, dividing itself between disposable, tinny dance pop tracks and generically sweeping, echo-y ballads.

The Supreme Court yesterday upheld a federal law that forbids providing training and advice to terrorist organizations even about entirely peaceful and legal activities, saying it does not violate the free speech rights of those who want to help.
Discuss COMMENTS (1) The court ruled, 6 to 3, that Congress and the executive branch had legitimate reasons for barring “material support’’ to foreign organizations deemed to be terrorists in the USA Patriot Act.
Those challenging the law “simply disagree with the considered judgment of Congress and the executive that providing material support to a designated foreign terrorist organization — even seemingly benign support — bolsters the terrorist activities of that organization,’’ Chief Justice John G. Roberts Jr. wrote for the majority.
“That judgment, however, is entitled to significant weight, and we have persuasive evidence before us to sustain it.’’
He was joined by the court’s conservatives — Justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas, and Samuel A. Alito Jr. — as well as its most liberal member, retiring Justice John Paul Stevens.
Justice Stephen G. Breyer took the relatively unusual step of reading his dissent from the bench, saying the court had abandoned its role of protecting individual liberties under the First Amendment because of national security threats Congress did not adequately justify.
“In such cases, our decisions must reflect the Constitution’s grant of foreign affairs and defense powers to the president and to Congress but without denying our own special judicial obligation to protect the constitutional rights of individuals,’’ Breyer said.
“That means that national security does not always win.’’
He was joined in the dissent by Justices Ruth Bader Ginsburg and Sonia Sotomayor.
The Obama administration said the law has been used about 150 times since the Sept. 11, 2001, terrorism attacks. But it has rarely been used for the kind of speech involved in this case.
The aid groups that challenged the law had trained a Kurdish group in Turkey on how to bring human rights complaints to the United Nations and assisted them in peace negotiations. They suspended the activities when the United States designated the Kurdish organization, known as the PKK, a terrorist group in 1997. The groups wanted to give similar help to a group in Sri Lanka, but the United States designated it a terrorist organization in 1997.
Nearly four dozen organizations are on the State Department list, including Al Qaeda, Hamas, Hezbollah, Basque separatists in Spain, and Maoist rebels in Peru.
The humanitarian groups, including the Humanitarian Law Project, an organization based in California; Ralph Fertig, a civil rights lawyer; and Nagalingam Jeyalingam, a physician; want to offer assistance to the Kurdistan Workers’ Party in Turkey or the Liberation Tigers of Tamil Eelam in Sri Lanka.
In other action yesterday, the justices:
■ Decided to allow a new trial for a woman who got breast cancer after taking hormone replacement therapy and is seeking punitive damages against Wyeth Pharmaceuticals. The justices rejected Wyeth’s attempt to block the trial because it is to be limited to punitive damages. Wyeth is a subsidiary of Pfizer Inc., the world’s largest drug company.
■ Ruled that a federal judge went too far when he banned the planting of genetically engineered alfalfa seeds after reports that the plants might harm the environment. The court, on a 7-to-1 vote, reversed a federal appeals court ruling that had prohibited Monsanto Co. from selling alfalfa seeds because they are resistant to the popular weed killer Roundup.

Residents of a small city in eastern Nebraska voted Monday to banish illegal immigrants from jobs and rental homes, defying an earlier decision by the city’s leaders and setting off what is all but certain to be a costly and closely watched legal challenge.
In Fremont , a meat-packing town of about 25,000 people, unofficial results from The Associated Press late Monday showed that 57 percent of voters approved a referendum barring landlords from renting to those in the country illegally, requiring renters to provide information to the police and to obtain city occupancy licenses, and obliging city businesses to use a federal database to check for illegal immigrants.
Opponents of the new law, including some business and church leaders, had argued that the City of Fremont simply could not afford the new law, which is all but certain to be challenged in court. In a flurry of television commercials and presentations by opponents in the final days before Monday’s vote, opponents said paying to defend such a local law would require a significant cut in Fremont city services or a stiff tax increase — or some combination of the two.
“There were a lot of tears in this room tonight,” said Kristin Ostrom, an opponent who gathered with others in an old V.F.W. building to await the results. “Unfortunately, people have voted for an ordinance that’s going to cost millions of dollars, and that says to the Hispanic community that the Anglo community is saying they are not welcome here. They thought they were coming to a small-town community with small-town values.”
But advocates argued that federal authorities had failed to enforce their own immigration restrictions, leaving places like Fremont — with a small but growing Hispanic population — to take care of such matters themselves. They complained that illegal immigrants were causing an increase in crime, taking jobs that would once have gone to longtime residents, and changing the character of their quiet city, some 30 miles of farm fields from Omaha.
Within minutes of the results being announced, officials from the A.C.L.U. Nebraska pledged to file a lawsuit as quickly as possible.
“If this law goes into effect, it will cause discrimination and racial profiling against Latinos and others who appear to be foreign born, including U.S. citizens,” Laurel Marsh, executive director of A.C.L.U. Nebraska , said in a statement issued late Monday. “The A.C.L.U. Nebraska has no option but to turn to the courts to stop this un-American and unconstitutional ordinance before the law goes into effect. Not only do local ordinances such as this violate federal law, they are also completely out of step with American values of fairness and equality.”
Fremont’s Hispanic population, practically nonexistent two decades ago, has grown to about 2,000 people, according to some estimates. No one knows how many illegal immigrants live in Fremont, and the estimates (depending on which side of this debate one is on) vary enormously.
Still, some in Fremont point, with worry, to other Nebraska towns — places like Schuyler and Lexington — as communities that no longer look or feel the way they once did.
In recent years, numerous towns and cities around the nation have considered adopting laws restricting illegal immigrants. But in most cases, political leaders and town councils have been the ones to pass the provisions — not the voters. And the laws have proven politically-tangled: measures in towns like Hazleton, Pa., and Farmers Branch, Tex., are still being fought in court, while some other cities (facing the prospect of drawn-out legal battles) have dropped the issue.
That almost happened in Fremont. Two years ago, a City Council member in Fremont suggested the city should pass a law on illegal immigrants. But after two emotional hearings — with what both sides said was participants from all over the state, the Council voted 4 to 4 on the proposal. The longtime mayor then voted against it, saying that he, too, was opposed to illegal immigrants but had come to believe that the question was one that had been, legally speaking, left to federal authorities, not Fremont.
Some residents were outraged by the choice, and began collecting signatures on a petition to put the question to a vote — the vote that ultimately came on Monday.
As residents of Fremont began considering what the decision would now mean, details of the new law were a new matter for debate. Some noted, with puzzlement, that the law would not apply to the area’s two biggest meatpacking plants (including Hormel, the largest employer) because they are just outside the city’s official boundaries, and that the law would also not apply to “casual labor for domestic tasks” around Fremont homes. But some said they believe the housing requirements — and new $5 occupancy license rule — might apply to people living in nursing homes.

The convoys are attacked if payments are not made, according to allegations in a US military document.
The congressional report follows a six-month investigation.
The document states that trucks carrying food, water, fuel, and ammunition may be supplying up to $4 million (£2.7m) per week to the firms.
A US congressional committee is expected to hear the evidence on the investigation from senior officials at the US Department of Defense later on Tuesday.
‘Vast protection racket’ The congressional subcommittee that carried out the investigation says that bribes are paid to the Taliban and virtually every governor, police chief and local military commander whose territory the convoys pass through.
One of the security companies in question is alleged to be owned by two cousins of the Afghan President Hamid Karzai.
The report released late on Monday says the security agreements violate laws on the use of private contractors, as well as US Department of Defense regulations.
The report states that “although the warlords do provide guards and coordinate security, the contractors have little choice but to use them in what amounts to a vast protection racket”.
The document states that security companies hired under the Afghan Host Nation Trucking are the ones funneling the money.
Watan Risk management is one of the largest security providers in Afghanistan and one of the companies currently under investigation.
The military report states that representatives of the company allegedly negotiate or dictate the price of safe passage in a given area. The company then issues warnings to trucking companies who are late in paying or refuse to pay the sum.
A spokesman for the Army Criminal Investigation Command at Fort Belvoir, Virginia, confirmed to the AP news agency that the inquiry is taking place.