Crude oil fell after Germany’s economy almost stalled in the second quarter, bolstering concern that fuel consumption will diminish. Futures dropped as much as 2.6 percent after Germany’s Federal Statistics Office said gross domestic product in Europe’s largest economy rose 0.1 percent from the first quarter. European economic growth slowed more than economists forecast during the period as the sovereign-debt crisis worsened. A U.S. government report tomorrow may show U.S. oil supplies fell to a five-month low. “The disappointing German GDP number is responsible for the bulk of the sell-off we’ve seen today,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Germany was expected to carry the entire euro-zone and now its economy appears to be faltering.” Crude oil for September delivery declined $1.05, or 1.2 percent, to $86.83 a barrel at 9:21 a.m. on the New York Mercantile Exchange. Yesterday, the contract climbed 2.9 percent to $87.88, the highest settlement since Aug. 3. Prices have risen 14 percent in the past year. Brent oil for September settlement fell 73 cents, or 0.7 percent, to $109.18 a barrel on the ICE Futures Europe in London. The European benchmark was at a premium of $22.35 to U.S. futures, compared with a record $23.79 on Aug. 10 based on closing prices. Economists had forecast German growth of 0.5 percent, according to the median of 33 estimates in a Bloomberg News survey. GDP for the first three months of the year was revised from 1.5 percent to 1.3 percent by the Wiesbaden-based statistics office. ‘Global Demand Picture’ “We’re giving back a lot of yesterday’s gains on concerns about the euro-zone,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York. “The economic weakness raises concerns about the global demand picture.” Gross domestic product in the 17-nation euro area rose 0.2 percent from the first quarter, when it increased 0.8 percent, the European Union’s statistics office in Luxembourg said today. That’s the worst performance since the region emerged from a recession in late 2009. Economists forecast the economy would expand 0.3 percent, according to a Bloomberg News survey. German Chancellor Angela Merkel will meet French President Nicolas Sarkozy today in Paris. The talks were announced last week as debt concerns rattled France, the second-largest euro economy after Germany. “The overall picture is that worldwide economic activity is slowing down a bit, and of course that’s bearish for oil,” said Sintje Diek, an analyst at HSH Nordbank in Hamburg who correctly predicted that Brent prices would fall to $100 this summer. “There are fears the recovery in the euro zone will be very sluggish because of the debt crisis. Maybe we’ll see lower prices than $100.” Chinese Growth Growth in China, the world’s second-biggest oil consumer, is “significantly moderating,” the Conference Board, a New York-based research organization, said today. The nation’s expansion may cool to 9.2 percent in the third quarter from 9.5 percent in the previous three months, the China Securities Journal reported today, citing the State Information Center. An Energy Department report tomorrow may show U.S. crude stockpiles declined as imports fell and refineries ran near the highest rates of the year, according to a Bloomberg News survey. Inventories dropped 250,000 barrels from the previous week’s 349.8 million last week, according to the median of 12 analyst estimates in the survey. That would leave stockpiles at the lowest level since March 4. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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