Oil traded near the lowest in more than a month as signs the U.S. economy is slowing countered speculation that the world’s biggest crude consumer will be able to solve its debt crisis. Oil pared earlier gains to trade little changed as concern shifts to the slowing U.S. recovery after the House approved legislation to raise the debt limit, a day before a possible default. A report today is forecast to show personal spending stagnated in June, after data yesterday showed a gauge of manufacturing weakened to a two-year low. U.S. crude inventories probably climbed for a second week, according to a Bloomberg survey before a government data is released tomorrow. “Although the debt ceiling situation seems to have been resolved, these weak macro-indicators out of the U.S. have overshadowed it and that’s what’s causing some weakness in the oil price,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts crude will average $98 a barrel in the third quarter. Crude for September delivery traded at $94.82 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 2:11 p.m. in Sydney today. It earlier rose as much as 56 cents, or 0.6 percent, to $95.45. The contract yesterday fell 81 cents to $94.89, the lowest since June 29. Brent oil for September settlement dropped 33 cents to $116.48 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $21.65 a barrel to New York futures, compared with a record close of $22.63 on July 14. U.S. Stockpiles Oil in New York slipped yesterday after a gauge of U.S. manufacturing showed growth at the slowest pace in two years. The Tempe, Arizona-based Institute for Supply Management said its factory index decreased to 50.9 in July from 55.3 in June. An Energy Department report tomorrow may show total U.S. crude inventories climbed 1.5 million barrels in the seven days ended July 29, according to the median of nine analyst estimates in a Bloomberg News survey. Gasoline supplies probably rose 500,000 barrels, the survey shows. Tropical Storm Emily was moving quickly westward in the Caribbean Sea and was expected to strengthen, the National Hurricane Center said in a statement. The Dominican Republic issued a tropical storm warning, it said. 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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