By Mark Shenk April 22 (Bloomberg) -- Crude oil fell for the first time in three days after the European Union said Greece’s budget deficit last year was worse than previously forecast, sending equities and the euro lower. Oil slipped as much as 2.3 percent in New York after the U.S. currency’s gain dimmed the appeal of commodities as an alternative investment. An Energy Department report yesterday showed that U.S. crude and fuel supplies increased last week as demand slipped in the world’s largest energy-consuming country. “The stuff out of Europe doesn’t get any better,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “The problems out of Europe continue to impact the dollar and raise concerns about economic growth.” Crude oil for June delivery dropped $1.22, or 1.5 percent, to $82.46 a barrel at 10:06 a.m. on the New York Mercantile Exchange. Futures are up 3.6 percent this year. The EU’s statistics office said Greece’s deficit was 13.6 percent of GDP last year, topping the government’s two-week-old forecast of 12.9 percent. Greece’s widening deficit and questions about the accuracy of its economic data have undermined the credibility of the EU’s budget rules and contributed to the 7.2 percent slide in the euro this year. The dollar traded at $1.3288 against the European currency, up 0.8 percent from yesterday. It was the greenback’s sixth straight increase. The Standard & Poor’s 500 Index slid 0.9 percent to 1,194.71. The Energy Department’s report showed crude-oil stockpiles in the U.S. increased by 1.89 million barrels in the week ended April 16. Gasoline supplies rose 3.59 million barrels to 224.9 million, and inventories of distillate fuel, a category that includes heating oil and diesel, gained 2.1 million barrels to 148.9 million. Cushing Stockpiles Supplies of crude oil at Cushing, Oklahoma, where the New York-traded West Texas Intermediate oil grade is stored, surged 5.8 percent to 34.1 million barrels, the highest since the week ended Jan. 8. “One piece of data that’s still very important for the market is the Cushing stocks,” said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. “The builds in Cushing are having a huge impact on the price curve.” The price of oil on the Nymex for June delivery is $2.09 lower than for July, the widest divergence between front-month contracts since Dec. 14. This structure, in which the future month’s price is higher than for the one before it, is known as contango and allows buyers to profit from storing oil. “We have an incredible contango developing,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “This has the potential to lead to even bigger inventories, which could weigh on prices.” Brent Futures Brent crude oil for June settlement slipped $1.09, or 1.3 percent, to $84.61 a barrel on the London-based ICE Futures Europe exchange. “Demand in Europe and the U.S. is still weak,” said Tobias Merath, head of commodity research at Credit Suisse Group AG in Zurich. “We aren’t yet seeing the developed world make a positive contribution to demand growth. It was a fairly bearish oil data set, imports higher and demand lower.” Prices jumped earlier today after an oil pipeline from Iraq to Turkey was damaged in a bomb attack. Iraq has the world’s third-largest crude reserves. Unknown saboteurs detonated the explosive charge on the pipeline that runs from Iraq’s Kirkuk oil fields to the Turkish Mediterranean port of Ceyhan, said a police officer, who didn’t want to be identified by name for security reasons. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

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