By Ben Sharples and Yee Kai Pin Sept. 16 (Bloomberg) -- Oil fell for a third day in New York after a U.S. government report showed fuel demand declined last week and as Enbridge Energy Partners LP prepared to start a pipeline after repairs, easing supply concerns. Crude dropped more than 1 percent after the Energy Department said yesterday gasoline demand tumbled 2.6 percent to 9 million barrels a day, the lowest rate since the week ended March 12. Enbridge said it will start preparations to flow oil through a pipeline linking Canada and refineries in the U.S. Midwest early tomorrow. Manufacturing in the New York area expanded slower than forecast, signaling economic growth may falter, the Federal Reserve said yesterday. “We’re not seeing as much consumption as we thought,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “There is an oversupply of oil.” Crude for October delivery fell 78 cents percent to $75.24 a barrel in electronic trading on the New York Mercantile Exchange. It was at $75.25 at 1:12 p.m. Singapore time. Yesterday, the contract slipped 78 cents, or 1 percent, to $76.02. Futures have declined about 5 percent this year. The Federal Reserve Bank of New York’s general economic index slumped to 4.1 this month, the lowest level since July 2009, from 7.1 in August. Economists expected the reading to to climb to 8, according to a Bloomberg News survey. Houston-based Enbridge won’t restart its Line 6A until the Pipeline and Hazardous Materials Safety Administration is satisfied with the company’s repair and safety plans, administration spokesman Damon Hill said in an e-mail. Midwest Imports Oil topped $78 a barrel this week, a one-month high, after the Enbridge pipeline was shut Sept. 9 because of the leak at Romeoville, Illinois. It can carry 670,000 barrels a day of crude, more than one-third of U.S. Midwest imports. Gasoline in the Chicago spot market rose as much as 10 percent amid speculation refiners would cut output, tightening supply. U.S. fuel demand slipped 1 percent to 19.5 million barrels a day last week, according to the Energy Department. Crude stockpiles dropped 2.49 million barrels to 357.4 million last week, the report showed. That matched the median 2.5 million- barrel drawdown estimated by analysts in a Bloomberg News survey. Supplies were 13 percent higher than the five-year average level. Gasoline inventories decreased by 694,000 barrels to 224.5 million last week as imports fell to a five-month low and refinery output declined, the department said. Stockpiles of distillate fuel, including heating oil and diesel, were down 340,000 barrels at 174.5 million. Tropical Storm Karl Brent crude for November settlement on the London-based ICE Futures Europe exchange dropped 43 cents to $78.99 a barrel. The October contract declined 0.3 percent to $78.91 yesterday, when it expired. Tropical Storm Karl, which came ashore yesterday on Mexico’s Yucatan Peninsula, is about to enter the southwestern Gulf of Mexico today, according to the U.S. National Hurricane Center. It may strengthen to a hurricane. Hurricane Igor, packing maximum sustained winds of 135 miles (217 kilometers) per hour, moved west-northwest toward Bermuda. To the east, Hurricane Julia weakened to a Category 3 storm and isn’t expected to threaten land. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net

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