Oil erased earlier gains on concern that the European Union’s debt crisis may not be resolved by the group’s summit this week. Crude was little changed in New York after rising as much as 0.7 percent, snapping three days of gains. Futures retreated as the dollar gained against the euro after a German government official said Chancellor Angela Merkel’s government is more pessimistic of the outcome of a European Union leaders’ summit in Brussels beginning tomorrow. “Investors are not convinced that the upcoming EU summit will address the sovereign debt issue and they feel that the struggling continent will show a drop in demand,� said Glen Ward, head of retail derivatives at London Capital Group Ltd. Crude for January delivery on the New York Mercantile Exchange was at $101.26 a barrel, down 2 cents, after gaining as much as 66 cents to $101.94 a barrel. It was at $101.61 at 10:30 a.m. London time. Yesterday, the contract added 29 cents to $101.28, the highest settlement since Nov. 16. Prices are up 11 percent this year after climbing 15 percent in 2010. Brent oil for January settlement on the London-based ICE Futures Europe exchange was down 11 cents at $110.70 a barrel after rising as much as 0.6 percent to $111.49 a barrel. The European benchmark contract was at a premium of $9.45 to New York-traded West Texas Intermediate. The spread reached a record $27.88 on Oct. 14. To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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