By Ben Sharples and Yee Kai Pin March 24 (Bloomberg) -- Crude oil declined for the first time in three days after an industry report showed U.S. stockpiles at an eight-month high, signaling fuel demand from the world’s biggest energy consumer may be slow to recover. Oil pared yesterday’s advance after the American Petroleum Institute reported that U.S. crude inventories increased 7.51 million barrels to 351.5 million. An Energy Department report today may show supplies rose 1.65 million barrels, the eighth weekly gain, according to the Bloomberg News survey of analysts. The dollar jumped to a 10-month high against the euro, damping the investment appeal of commodities. “Refinery rate utilization is weak and there’s been pretty strong imports of crude into the U.S., and a lot of it seems to be sitting around, that’s why you’re getting these builds,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Fundamentals are improving, but are still pretty weak.” Crude oil for May delivery fell as much as 83 cents, or 1 percent, to $81.08 a barrel in electronic trading on the New York Mercantile Exchange. It was at $81.18 at 4:34 p.m. Singapore time. Oil dropped as the dollar strengthened against the euro amid concern Greece would need help from the International Monetary Fund, undermining confidence in the European Union. The U.S. currency reached $1.3407 against the euro, the highest since May 8, 2009. “There is further uncertainty around the sovereign debt issues in the euro zone, in Greece especially,” Westmore said. Five-Year Average Commercially held U.S. crude inventories probably increased in the week to March 19, the Bloomberg survey showed. Stockpiles previously reached 344 million barrels, 5 percent above the five-year average level. The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington. Oil has climbed less than 3 percent this year amid concern supply was outpacing global demand, even as economies recovered from the recession. Implied volatility for futures traded in New York sank to the lowest level in more than two years after prices last week failed to sustain a rally above $82 a barrel. Brent crude oil for May settlement fell as much as 77 cents, or 1 percent, to $79.93 on the London-based ICE Futures Europe exchange. The contract was at $80 at 4:34 p.m. Singapore time. To contact the reporters on this story: Ben Sharples in Sydney at bsharples@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net

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