Oil dropped for a second day in New York, trimming a third week of gains, as investors bet that signs of a slowing U.S. economy indicate fuel demand will falter in the world’s biggest crude consumer. Futures slid as much as 0.7 percent after Federal Reserve Chairman Ben S. Bernanke said the economic recovery is fragile. An Energy Department report showed gasoline stockpiles climbed 199,000 barrels last week, compared with an analyst forecast for a 1.4 million barrel decline. Tropical Storm Nate is forecast to become a hurricane today in the Gulf of Mexico, the National Hurricane Center said. Crude for October delivery fell as much as 65 cents to $88.40 a barrel in electronic trading on the New York Mercantile Exchange and was at $88.58 at 9 a.m. Sydney time. The contract yesterday slipped 29 cents to $89.05. Prices are 2.5 percent higher this week and up 19 percent the past year. Brent oil for October settlement decreased $1.25, or 1.1 percent, to $114.55 a barrel on the London-based ICE Futures Europe Exchange yesterday. The European benchmark contract closed at a premium of $25.50 to U.S. futures, compared with a record settlement of $26.87 on Sept. 6. Fed policy makers will discuss the tools they could use to boost the economic recovery at their next meeting this month, Bernanke told economists in a speech in Minneapolis yesterday. U.S. equities fell after he failed to give specific plans. The Standard & Poor’s 500 Index slipped 1.1 percent at 4 p.m. in New York. Growth, Stockpiles The Organization for Economic Cooperation and Development cut growth forecasts yesterday for the U.S. and Japan, the largest and third-largest oil-consuming countries. China is the second-biggest user of crude. U.S. crude stockpiles fell 3.96 million barrels to 353.1 million, the Energy Department report showed. They were forecast to drop 2 million barrels, according to the median estimate of 14 analysts surveyed by Bloomberg News. Nate’s top winds are 70 miles (113 kilometers) per hour, just under the threshold of 74 mph needed to be a hurricane, according to an advisory from the U.S. National Hurricane Center at 5 p.m. East Coast time. The storm has been lashing Petroleos Mexicanos rigs in the Bay of Campeche and its final track is still in question. 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 in Singapore at akwiatkowsk2@bloomberg.net

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