Oil slid for a third day in New York as investors bet Europe’s debt crisis will harm economic growth, tempering demand for raw materials. Gulf of Mexico producers resumed production as the threat of storms eased. West Texas Intermediate futures slid as much as 1.5 percent, extending the longest losing streak in a month, as speculation Germany is preparing for a Greek default sent the euro lower against the dollar, limiting the appeal of commodities. Nate weakened to a post-tropical cyclone as it moved further inland over Mexico, according to the U.S. National Hurricane Center. About 6 percent of Gulf oil output remained shut as of Sept. 9 after Tropical Storm Lee passed, compared with 27 percent a week earlier. “Oil is highly leveraged to global growth prospects,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “Any negative sentiment around global growth does tend to weigh on the oil price and that’s one of the reasons we’ve seen West Texas come off so heavily.” Crude for October delivery fell as much as $1.33 to $85.91 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.15 at 1:57 p.m. Sydney time. The contract slipped $1.81 to $87.24 on Sept. 9. Prices are 12 percent higher the past year. Brent oil for October settlement decreased 86 cents, or 0.8 percent, to $111.91 a barrel on the London-based ICE Futures Europe Exchange. The European benchmark contract was at a premium of $25.75 to U.S. futures, compared with the record settlement of $26.87 on Sept. 6. Bullish Bets About 6.2 percent of oil production and 4 percent of natural gas output from the Gulf of Mexico are still shut after Lee battered the area, a Bureau of Ocean Energy Management, Regulation and Enforcement report showed Sept. 9. Nate was about 75 miles (120 kilometers) south-southwest of Tuxpan, Mexico, with maximum sustained winds of 30 miles per hour, the hurricane center said in an advisory before 10 p.m. Central Daylight Time yesterday. Hedge funds cut bullish bets on oil last week while increasing those on gasoline. The funds and other large speculators reduced wagers that prices will rise by 5,780 futures and options combined, or 3.6 percent, to 155,837, according to the Commodity Futures Trading Commission’s Commitments of Traders report. Bets motor fuel will rally increased by 13 percent, the data showed. “The idea that European and U.S. economic growth is going to be weak over the next year seems like a reasonable forecast,” said John Vautrain, a senior vice-president at Purvin & Gertz Inc. in Singapore. “WTI will stay enormously depressed, $10 to $20 a barrel or more below Brent.” Crude extended losses today as the euro fell to its lowest level since 2001 against the yen and slid versus the dollar. Speculation that German Chancellor Angela Merkel is preparing for a Greek default curbed demand for the shared currency, limiting investor demand for dollar-denominated oil futures as a hedge. 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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