By Ben Sharples and Yee Kai Pin March 25 (Bloomberg) -- Oil declined for a second day in New York after U.S. crude stockpiles increased more than analysts expected, adding to concern that demand from the world’s biggest energy consumer may be slow to recover. Oil ended a two-day advance yesterday after the Energy Department said crude inventories rose 7.25 million barrels to the highest since August, more than four times the gain estimated in a Bloomberg survey. Prices also dropped as the dollar surged to a 10-month high against the euro after Fitch Ratings cut Portugal’s credit grade. A stronger dollar damps the investment appeal of commodities. “The U.S. looks like it’s facing a very slow and uneven recovery,” said Toby Hassall, research analyst at CWA Global Markets Pty in Sydney. “U.S. oil demand has struggled to improve after the contraction caused by the downturn.” Crude oil for May delivery fell as much as 41 cents, or 0.5 percent, to $80.20 a barrel in electronic trading on the New York Mercantile Exchange. It was at $80.29 at 1:54 p.m. Singapore time. Yesterday, the contract lost 1.6 percent to settle at $80.61. Prices slipped as much as 2.5 percent after Portugal’s downgrade, the first by Fitch, renewed concern the fiscal crisis in Greece may spread in Europe. The dollar traded at $1.3295 against the euro at 1:50 p.m. in Singapore, from $1.3315 yesterday in New York. “We’re seeing a situation in the OECD economies of soft demand,” Hassall said. “There was a huge build in crude stockpiles.” Supply Forecast U.S. crude oil inventories were forecast to climb 1.65 million barrels, based on the median estimate from 16 analysts polled by Bloomberg News. Stockpiles increased for an eighth week to 351.3 million, 6.4 percent above the five-year average, according to the Energy Department. Crude imports jumped 12 percent to 9.4 million barrels a day, the highest level since September, the report showed. U.S. fuel demand over the past four weeks averaged 19.36 million barrels a day, up 3.6 percent from a year earlier. “This market was well supported above $80 last night but I think the upper side should be limited,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. “It’s still possible to go below $80 depending on the euro.” Brent crude oil for May settlement fell as much as 42 cents, or 0.5 percent, to $79.20 a barrel on the London-based ICE Futures Europe exchange. The contract was at $79.22 at 1:53 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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