Oil fell in New York after Federal Reserve Chairman Ben S. Bernanke said he sees increasing risk to the economic outlook and the Standard & Poor’s 500 Index dropped after the biggest gain in two weeks. Crude slipped 0.3 percent as Bernanke disappointed investors by not detailing new plans to boost growth in the world’s largest economy. Oil settled below a $90 technical resistance level after reaching $90.23 in intraday trading on speculation that tropical storms would affect supply. “Crude is an extremely volatile product,” said Todd Horwitz, chief strategist at Adam Mesh Trading Group in New York. “I’m going to be short as long as it closes below $90. The crude is kind of tracking the S&P 500 tick for tick.” Oil for October delivery fell 29 cents to settle at $89.05 a barrel on the New York Mercantile Exchange. Futures have fallen 2.6 percent this year. It was the second consecutive day that futures rose above $90 in intraday trading only to settle lower. A close above $90 would breach a technical top established in late July and early August when futures were trading roughly between $80 and $90 a barrel, Horwitz said. Futures last settled above $90 on Aug. 3. Brent crude for October slipped $1.25, or 1.1 percent, to $114.55 a barrel on the London-based ICE Futures Europe Exchange. Equities Drop Fed policy makers will discuss the tools they could use to boost the economic recovery at their next meeting this month and “are prepared to employ these tools as appropriate to promote a stronger economic recovery in the context of price stability,” Bernanke said in the text of a speech to economists today in Minneapolis. Stocks fell on Bernanke’s comments and as investors waited for President Barack Obama to discuss the economy at a joint session of Congress tonight. He is expected to propose a more than $300 billion stimulus plan as job growth stalls and the unemployment rate hovers above 9 percent. The S&P 500 fell 1.1 percent to 1,185.90 at 4:05 p.m. in New York. The Dow Jones Industrial Average lost 119.05 points, or 1 percent, to 11,295.81. “Markets have adjusted to a level where growth is no longer priced in,” said Kaha Kiknavelidze, a London-based managing partner at Rioni Capital Partners LLP, a hedge fund that specializes in emerging markets. Jobless claims rose by 2,000 to 414,000 in the week ended Sept. 3, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected a drop in claims to 405,000, according to the median forecast. The number of people on unemployment benefit rolls and those receiving extended payments fell. U.S. Growth The Organization for Economic Cooperation and Development also cut growth forecasts today for the U.S. and Japan today, the largest and third-largest oil-consuming countries. China is the second-biggest user of crude. The U.S. economy will grow 1.1 percent in the third quarter and 0.4 percent in the fourth, the OECD said today, instead of the 2.9 percent and 3 percent the organization predicted in May. Japan’s economy will expand 4.1 percent in the third quarter and stall in the fourth, the OECD forecast. European Central Bank President Jean-Claude Trichet said that “downside risks” to the region’s economy have intensified, causing the euro to tumble the most in a month against the dollar. The euro dropped 1.6 percent to $1.388 at 4:53 p.m. in New York. A weaker euro and stronger dollar curbs commodities’ appeal as an alternate investment to the U.S. currency. Supplies Drop Earlier, oil rose as much as 1 percent after the Energy Department reported inventories fell almost twice as much as expected last week as half of U.S. Gulf of Mexico oil output was shut because of Tropical Storm Lee. Tropical Storm Nate, which is forecast to strengthen in Mexico’s Bay of Campeche, may limit output and imports this week. “We are having a stormy season down there, but I’d really have to see more economic activity before I’d consider this really bullish,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. Oil supplies dropped 3.96 million barrels to 353.1 million barrels as imports tumbled to their lowest level since April and demand fell in the government report. Stockpiles were forecast to decline by 2 million barrels, the median of 14 estimates in a Bloomberg News survey before the report. Nate, with winds of 70 miles (110 kilometers) per hour, was about 120 miles west of Campeche, Mexico, the country’s main oil-producing region, according to an National Hurricane Center advisory at 5 p.m. in New York. It was just 4 mph below the threshold for a hurricane and may become one tomorrow, it said. Oil volume in electronic trading on the Nymex was 677,494 contracts as of 4:53 p.m. in New York. Volume totaled 665,161 contracts yesterday, 2.3 percent below the average of the past three months. Open interest was 1.52 million contracts. To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net. To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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