Oil fell below $80 a barrel in New York for the first time in more than a week on concern that slower economic growth will erode fuel demand. Brent crude traded at a record premium to U.S. prices. Futures lost as much as 3.9 percent today, and headed for their fourth weekly decline amid concern Europe’s debt crisis will spread. U.S. crude supplies unexpectedly increased last week, an Energy Department report showed Aug. 17. Supply disruptions in the North Sea and Africa have boosted Brent to $25.95 a barrel above New York crude, which has tumbled 30 percent from its peak this year. “Speculation about the debt burden in European countries may trigger a new round of risk aversion,” said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo, who predicts that Brent will be unable to rebound beyond $118 a barrel this quarter. Crude for September delivery dropped as much as $3.21 to $79.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $79.67 at 9:34 a.m. London time. Prices are down 6.7 percent for the week. The more actively traded October contract fell $2.52 to $79.99. Brent oil for October settlement declined as much as $1.93, or 1.8 percent, to $105.06 a barrel on the London-based ICE Futures Europe exchange. Prices are 2.2 percent lower this week and 17 percent below this year’s high. Record Premium Brent’s premium has widened amid supply disruptions in the North Sea, Nigeria and Libya, in contrast to increasing stockpiles in the U.S. Brent, a benchmark grade for Europe, the Mediterranean and Africa, last traded at a discount to New York crude on Aug. 16, 2010. “There’s weakness across the euro zone and the possibility of a dip back into recession is now a material probability,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts U.S. futures will average $93 a barrel in the third quarter. U.S. oil inventories increased 4.23 million barrels to 354 million last week, the Energy Department said on Aug. 17. They were forecast to drop 500,000 barrels, according to a Bloomberg News survey of analysts. Supplies haven’t been disrupted by the weather as much as in previous years. The 2011 Atlantic storm season has set a record for the most tropical systems without a hurricane, according to Dennis Feltgen, a spokesman for the National Hurricane Center in Miami. Seven named storms have formed this year, a number the season usually doesn’t reach until Sept. 16. Ichimoku Cloud Oil is extending losses as futures drop below technical support at about $83.83 a barrel, according to data compiled by Bloomberg. That’s the lower of two leading-span lines marking a so-called Ichimoku cloud on the weekly technical chart. Crude fell to a four-year low of $32.40 in December 2008 about two months after breaching a similar support level at $88.83. Prices may extend their decline next week, a Bloomberg News survey showed. Sixteen of 38 analysts, or 42 percent, forecast a decline through Aug. 26. Last week, 41 percent of respondents projected a gain. Oil is being driven lower by financial markets, not by supply and demand, Qatar’s oil minister, Mohammed Saleh al Sada, said in Doha yesterday. Qatar, a member of the Organization of Petroleum Exporting Countries, pumped 810,000 barrels of oil in July, according to Bloomberg News estimates. “In view of the fact that oil is a strategic commodity, we are watching what is happening in global markets,” he said. Global Economy Citigroup Inc. cut its growth forecast for the U.S., joining Morgan Stanley in raising concern the global economy will slow. Data yesterday showed jobless claims rose and Philadelphia-area manufacturing shrank by the most since 2009. China will expand 8.9 percent this year, down from an earlier forecast of 9.1 percent, Deutsche Bank AG said in a report dated Aug. 17, citing the “shock” of a U.S. and European Union slowdown. The U.S., China and Europe will account for about 48 percent of global oil demand this year, according to International Energy Agency estimates. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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