Oil fell from a three-week high, trimming its second weekly advance, on speculation that yesterday’s 2.1 percent rally was exaggerated amid signs of ample crude supplies in the U.S. Futures slipped as much as 0.3 percent today. Crude supplies fell 889,000 barrels to 358.6 million last week, the lowest level since April, an Energy Department report showed. A 2.5 million-barrel decline was projected, according to the median estimate of 15 analysts surveyed by Bloomberg News. “The DOE report had bullish headline factors, but it was hardly as bullish as prices would suggest,” Peter Beutel, president of Cameron Hanover Inc., an energy adviser in New Canaan, Connecticut, said in an e-mailed note. Crude for August delivery slid as much as 33 cents to $98.34 a barrel in electronic trading on the New York Mercantile Exchange, and was at $98.45 at 2:53 p.m. Sydney time. The contract yesterday climbed $2.02 to $98.67, the highest since June 14. Prices are 3.7 percent higher this week and up 30 percent the past year. Brent oil for August settlement fell 73 cents, or 0.6 percent, to $117.86 a barrel on the London-based ICE Futures Europe exchange. Brent’s premium to New York crude futures is headed for a second weekly gain after widening the most in almost four months yesterday as Libyan output cuts and North Sea maintenance drive the European benchmark grade higher. Futures in London were $19.92 a barrel higher than West Texas Intermediate in New York yesterday, after widening $2.95, the most since March 9. The gap between front-month futures of both grades surged to a record $22.29 on June 15. Economic Data Oil rose yesterday after data showed companies in the U.S. added twice as many workers as forecast in June and industrial production increased in Germany. U.S. companies added 157,000 workers in June, according to data from ADP Employer Services. An increase of 70,000 was projected, according to the median forecast by Bloomberg News. The U.S. added 105,000 jobs in June, almost double the 54,000 created a month earlier, according to the median estimate in a Bloomberg News survey before a Labor Department report today. Private hiring climbed 125,000 last month, while the jobless rate held at 9.1 percent, the survey showed. Industrial production in Germany, Europe’s largest economy, increased more than economists forecast in May, led by rising output of investment goods such as machines. Production jumped 1.2 percent from April, when it fell a revised 0.8 percent, the Economy Ministry in Berlin said yesterday. Economists forecast a gain of 0.8 percent in a Bloomberg News survey showed. “It’s a temporary indication that growth is likely to be a bit healthier in the second half and that’s good for oil demand, especially given that we’ve got relatively abundant crude stocks in the U.S. still,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil will average $113 a barrel in the third quarter. Libya’s output slumped more than 90 percent to 150,000 barrels a day in June from January, amid fighting between government forces and rebels opposed to Muammar Qaddafi’s four- decade rule. About 132 million barrels of Libyan oil supply was lost through the end of May, according to the International Energy Agency. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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