Crude oil declined from a three-month high in New York before the release of economic data forecast to show that the recovery is losing steam in the U.S., the world’s second-largest energy consumer. Oil fell for the first time in five days as equity markets retreated on speculation U.S. service industries grew at the slowest pace in five months in July. Gasoline inventories increased 2.3 million barrels last week, the American Petroleum Institute said yesterday. A government report later today may show motor fuel and crude supplies fell. “There’s at least a little more cautiousness about this afternoon’s numbers,” said Andy Sommer, senior analyst at EGL AG in Dietikon, Switzerland. “The numbers from the API were a bit mixed, with a sizeable crude stock draw but also gasoline stocks unexpectedly rose. So the market is waiting now for the Energy Department data.” Crude for September delivery dropped as much as 93 cents, or 1.1 percent, to $81.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $82.32 as of 12:43 p.m. London time. Brent for September settlement declined 41 cents to $82.27 a barrel on the London-based ICE Futures Europe exchange. Brent traded at a discount to its Nymex equivalent today after surpassing it yesterday for the first time since June 22. Buzzard Declines A surge in U.S. imports and cuts in oil supplies from the North Sea Buzzard field that feeds into the Brent crude stream has caused the spread between the benchmarks to narrow, said Societe Generale analyst Michael Wittner in a note. Oil’s 14-day relative strength index, a measure of how fast prices have risen or fallen in that period, yesterday rose to a four-month high of 67.23. A reading of 70 or more can be taken as a sign that a market is “overbought” and ready to drop. Yesterday, crude in New York rose 1.5 percent to $82.55, the highest settlement since May 4, after the euro advanced to the best level against the U.S. currency in three months. That often makes commodities more attractive as an alternative investment. Futures have gained 3.6 percent this year. The Tempe, Arizona-based Institute for Supply Management’s non-manufacturing index report is due at 10 a.m. in New York. A report from ADP Employer Services at 8:15 a.m. may show private payrolls rose by 30,000 in July after increasing by 13,000 in June and by an average 61,000 in the prior two months, according to a Bloomberg survey of economists. “There is more of a reality check that the U.S. is a bit shaky,” said Peter McGuire, managing director of CWA Global Markets Pty in Sydney. Crude inventories declined 776,000 barrels last week, the API said. Analysts surveyed by Bloomberg News before a Department of Energy report today said stockpiles probably fell by 1.65 million barrels. Crude Stockpiles Crude supplies declined 3.6 million barrels in storage along the U.S. Gulf Coast, according to the API. Oil inventories at Cushing Oklahoma, the delivery point for the Nymex oil contract, climbed by 666,000 to 37.896 million. Stockpiles there reached a record 37.994 million during the week of May 14. The American Petroleum Institute collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its survey. Oil-supply totals from the API and DOE moved in the same direction 76 percent of the time over the past four years, according to data compiled by Bloomberg. To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net

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