Crude oil fell after home prices in 20 U.S. cities dropped by the most in 18 months and on concern the country will default on its debts. Futures declined as much as 1.4 percent after the S&P/Case- Shiller index of property values in 20 cities fell 4.5 percent from May 2010, the group said today in New York. President Barack Obama warned of a “deep economic crisis” without a compromise to avert an Aug. 2 default. Oil rose earlier as a weaker dollar increased the appeal of commodities to investors. “Worries about the U.S. debt situation hurt the dollar and got us close to $100,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “The market appears to have got ahead of itself and was unable to break through $100. We’re also backing off because of the bearish Case-Shiller numbers.” Crude for September delivery dropped $1.22, or 1.2 percent, to $97.98 a barrel at 9:47 a.m. on the New York Mercantile Exchange. Futures have increased 24 percent in the past year. Brent oil for September settlement fell $1.14, or 1 percent, to $116.80 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract traded at a premium of $18.82 a barrel to West Texas Intermediate, the grade traded in New York, down from a record $22.63 on July 14, based on settlement prices. New York crude has gained 7.2 percent this year as the Dollar Index, which tracks the U.S. currency against six trading partners, has declined 6.7 percent. The dollar weakened to $1.4465 against the euro from $1.4377 yesterday. It fell to a record low versus the Swiss franc. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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