Oil Drops From Three-Day High on Rising U.S. Crude Supplies, Europe Crisis - Bloomberg

Oil declined from a three-day high in New York as investors bet that increasing U.S. crude supplies and signs that Europe’s debt crisis is spreading indicated demand for raw materials may falter.

Futures fell as much as 0.9 percent after the American Petroleum Institute said crude inventories rose for the first time in six weeks. An Energy Department report today may show supplies shrank. Prices also dropped after Ireland joined Portugal and Greece as the third euro-area nation to have its credit rating reduced to below investment grade.

“There’s still concern around the euro-zone,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $113 a barrel in the third quarter. “The crude market hasn’t improved much in terms of those supply dynamics. Demand is still pretty sluggish.”

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