By Yee Kai Pin and Ben Sharples April 16 (Bloomberg) -- Oil declined for a second day on concern the economy in the U.S., the world’s biggest energy consumer, may be slow to recover and as the dollar extended gains, damping the investment appeal of commodities. Oil slipped below $85 a barrel in New York as the U.S. currency strengthened against the euro amid speculation Greece will struggle to curb its budget deficit. U.S. weekly jobless claims unexpectedly climbed to a two-month high and industrial output in March rose 0.1 percent, less than analysts anticipated. “We’re likely to find some support in the near term around the mid-$80s although the fundamentals still don’t really support these prices,” said Victor Shum, a senior principal at U.S. energy consultants Purvin & Gertz Inc. in Singapore. “The move today has been a reaction to the strengthening U.S. dollar versus the euro. The issue with Greece adds to the volatility.” Crude oil for May delivery fell as much as 85 cents, or 1 percent, to $84.66 a barrel in electronic trading on the New York Mercantile Exchange. It was at $84.93 at 1:45 p.m. Singapore time. Yesterday, the contract lost 33 cents to settle at $85.51. Futures are little changed this week after gaining in the previous two weeks. Oil fell yesterday for the sixth time in seven days after the Labor Department said initial unemployment claims rose 24,000 to 484,000 in the week ended April 10. The increase had more to do with administrative factors reflecting volatility around the Easter holiday than economic reasons, according to a government spokesman. ‘Negativity’ “There was a bit of negativity that came into the market from the unemployment numbers,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. The dollar strengthened for a second day against the 16- nation euro before a meeting of European Union finance ministers in Madrid today to discuss swelling budget deficits. The greenback was at $1.3544 at 1:37 p.m. in Singapore, compared with $1.3573 in New York yesterday. U.S. crude oil inventories were 5.1 percent above the five- year average even after ending a 10-week drawdown last week. Commercially held stockpiles reached 354 million barrels in the week to April 9, the Energy Department said on April 14. Gasoline stockpiles were 4.7 percent above the average and distillate supplies were 23 percent higher. Price Survey Oil may rise next week, a Bloomberg News survey showed. Sixteen of 36 analysts and traders, or 44 percent, forecast prices will climb through April 23. Fifteen respondents, or 42 percent, predicted futures will drop and five said oil will be little changed. Last week, 50 percent of respondents said the market will pull back. “We’re going to bounce around a bit depending on whether the news is on the positive side of macroeconomics,” said Shum at Purvin & Gertz. “I think it’s likely to be a mix and I’ll say it’s likely to hover around the mid-$80s.” Brent crude oil for June settlement fell as much as 63 cents, or 0.7 percent, to $86.96 a barrel on the London-based ICE Futures Europe exchange. It was at $87.35 at 1:40 p.m. Singapore time. The May contract expired yesterday after rising $1.02, or 1.2 percent, to $87.17. To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net

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