Crude oil declined in New York as tumbling equity markets wiped out gains spurred by a forecast that U.S. crude inventories declined for a fourth week. Oil retreated with European equities and U.S. stock-index futures after International Business Machines Corp. and Texas Instruments Inc. reported revenue that missed analyst estimates. U.S. crude oil supplies probably fell 1 million barrels last week, according a Bloomberg News survey before tomorrow’s Energy Department report. “There’s still a very relaxed supply-and-demand situation, and all the medium-to-long-term indicators on the economic side are getting worse,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “There’s more chance of going below $70 than above $80.” Crude oil for August delivery fell 39 cents to $76.15 a barrel in electronic trading on the New York Mercantile Exchange at 12:36 p.m. London time after rising as high as $77.03. Brent crude oil for September settlement was 33 cents lower at $75.29 a barrel on the London-based ICE Futures Europe exchange. The August contract in New York expires today. The more- active September contract dropped 37 cents to $76.53 a barrel. Futures have lost 4 percent this year. European stocks declined, reversing an earlier gain, as automakers and telecommunication shares fell, and mining stocks pared their advance. The benchmark Stoxx Europe 600 Index slipped 0.6 percent to 244.77, after earlier rising as much as 0.7 percent. Futures on the Standard & Poor’s 500 Index expiring in September fell 0.7 percent. U.S. Stockpiles U.S. crude inventories probably dropped in the seven days ended July 16, the fourth consecutive week of declines, according to the median estimate of nine analysts surveyed by Bloomberg News before an Energy Department report. Refineries probably operated at 90.15 percent of capacity last week, down 0.35 percentage point from the previous week, according to the Bloomberg News survey. Utilization rates in the week ended July 9 were at the highest level since January 2008. Gasoline inventories probably increased 1 million barrels. The industry-funded American Petroleum Institute will publish its own weekly report on supply and demand levels at 4:30 p.m. local time in Washington D.C. today. “Oil is certainly looking more bullish than bearish,” said Peter McGuire, managing director of CWA Global Markets Pty in Sydney. “We still think it has upward traction from here. Traditionally, there is more demand this time of the year.” China overtook the U.S. as the world’s biggest energy user last year, according to the International Energy Agency. China consumed 2,252 million metric tons of oil equivalent in 2009 in the form of oil, coal, natural gas, nuclear power and renewable sources, IEA Chief Economist Fatih Birol said yesterday. That exceeded the 2,170 million tons used by the U.S. Recent patterns indicate China may surpass the U.S. as an oil importer within a decade, sooner than the IEA expects. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

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