By SELINA WILLIAMS LONDON—Crude-oil prices fell to erase last week's advance as the euro slumped against the dollar and gold soared to a fresh nominal record on heightened debt contagion worries ahead of Thursday's summit of leaders from the bloc of euro-using nations. Gold broke above $1,600 a troy ounce on the spot market in Europe and the euro touched 1.40145 against the dollar, compared with 1.4156 last Friday in New York as the mood over last week's bank stress tests turned sour over the credibility of the tests and on failing confidence in U.S. economic recovery. The front-month September Brent contract on London's ICE futures exchange fell 77 cents, or 0.7%, to $116.49 a barrel. The front-month August contract on the New York Mercantile Exchange shed 32 cents, or 0.3%, to $96.92 a barrel. "We think the general 'malaise' in most markets will keep the upside in energy somewhat in check and likely pressure prices somewhat lower from here," MF Global said in a research note. "Specifically, the potential for more negative surprises out of Europe will only increase the odds of such a currency-induced retracement." Trade was stuck in a fairly narrow range in both the Nymex and Brent crude contracts as market participants cast a wary eye on the debt contagion worries in Europe, U.S. debt ceiling issue and the slow economic recovery in the U.S., the world's top oil consumer. Federal Reserve Chairman Ben Bernanke's comments last week indicating that another round of economic stimulus was still a possibility, if needed, initially boosted prices. The momentum was hard to maintain and worries over the lack of agreement on the country's debt ceiling ahead of the Aug. 2 deadline returned to pressure prices, analysts said. "We expect a slow start to the week with crude consolidating in narrow ranges still focusing on the broader market," said VTB Capital vice president of commodities research Andrey Kryuchenkov. Write to Selina Williams at selina.williams@dowjones.com

Source