Crude Oil Declines First Day in Three on Possible S&P Credit Downgrades - Bloomberg

Oil declined from the highest in almost three weeks in New York as investors speculated that fuel demand will falter amid signs Europe is struggling to tame its sovereign debt crisis.

Futures slipped as much as 0.6 percent after Standard & Poor’s said it may strip Germany and France of their AAA credit ratings as it put 15 euro nations on review for possible downgrades. A U.S. Energy Department report tomorrow may show gasoline and distillate inventories rose, while crude stockpiles fell, according to a Bloomberg News survey of analysts.

“The market is anticipating the implications to global growth from Europe,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty. in Sydney. “The differential between Brent and West Texas is holding around the $9 level. In the absence of any supply-rattling events we would expect that to close back to parity.”

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