Crude oil fell from an 11-week high on speculation that Tropical Storm Bonnie won’t be strong enough to damage production platforms in the Gulf of Mexico. Oil slipped as much as 1.1 percent after the National Hurricane Center said that slight strengthening is possible when Bonnie reaches the Gulf tomorrow. Prices surged this week as global stock markets rallied on signals that economic growth will accelerate. “You had such a big lift yesterday that it makes sense to give back some of it,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “One reason we ended so strong yesterday was the tropical storm. The path is threatening but it probably will only be a tropical storm, and not much of one.” Crude for September delivery dropped 51 cents, or 0.6 percent, to $78.79 a barrel at 11:38 a.m. on the New York Mercantile Exchange. Yesterday, the contract rose to $79.30, the highest settlement since May 5, as stock markets advanced. September oil is up 3 percent this week. Gasoline for August delivery dropped 2.51 cents, or 1.2 percent, to $2.1215 a gallon in New York. An Air Force Reserve Hurricane Hunter plane found signs that Bonnie’s circulation is becoming less defined. “If this trend continues it is possible for Bonnie to degenerate,” according to a hurricane center forecast discussion. The Gulf accounts for about 31 percent of U.S. oil output and 10 percent of its natural-gas production, according to the Energy Department. The coast along Louisiana and Texas is home to 42 percent of U.S. refining capacity. BP Spill BP Plc said the storm’s high seas made it necessary to move ships working on the relief wells that will be used to kill the wrecked Macondo well in the Gulf, site of the worst oil spill in U.S. history. The delay will set back completion of the work to plug the well to the end of August. Crude oil extended declines as the euro fell against the dollar after a draft document said the 91 banks being stress- tested were examined only on European sovereign debt losses for the bonds they trade, rather than those they hold to maturity. The 16-nation European currency slipped to $1.2864, down 0.2 percent from $1.2893 yesterday. The Standard & Poor’s 500 Index was little changed at 1,095.03. “It’s interesting that we are trailing the S&P 500 today,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “We’ve been in the habit of correlating with the S&P 500 lately, which doesn’t make a lot of sense. Petroleum markets are quite different from equities and have their own fundamentals.” Price Outlook Crude oil may fall next week on speculation that U.S. inventories will climb as imports increase, a Bloomberg News survey showed. Thirteen of 34 analysts, or 38 percent, forecast crude oil will decline through July 30. Eleven respondents, or 32 percent, predicted that futures will be little changed and 10 saw an increase. Brent crude for September settlement on the London-based ICE Futures Europe exchange declined 49 cents, or 0.6 percent, to $77.33 a barrel. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

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