Oil declined, narrowing the first weekly gain in five, on speculation that U.S. measures to stimulate economic growth will fall short and that potential fuel shortages caused by Hurricane Irene might be short-lived. Futures fell as much as 0.6 percent in New York before a speech by Federal Reserve Chairman Ben S. Bernanke today and a U.S. government report that may show economic growth slowed in the second quarter. Gasoline pared gains posted yesterday on concern Irene may damp fuel consumption. “The market will be extremely disappointed at what happens at Jackson Hole this afternoon,” said Michael Hewson, a London- based market analyst at CMC Markets, which handles about $240 million a day in U.S. crude contracts. “The markets have built themselves up that Bernanke will pull a rabbit out of a hat, but I don’t think he is going to.” Crude for October delivery on the New York Mercantile Exchange fell as much as 55 cents to $84.75 a barrel and was at $84.85 at 9:45 a.m. London time. Yesterday, the contract added 14 cents to $85.30. Prices are up 3.1 percent this week, heading for their first weekly gain since the five days ended July 22, and are up 16 percent in the past year. Bernanke is scheduled to speak at an annual Kansas City Fed conference in Jackson Hole, Wyoming. European Central Bank President Jean-Claude Trichet will also make a presentation. Brent oil for October settlement on the London-based ICE Futures Europe exchange was down 52 cents at $110.10, set for a 1.4 percent climb this week. The contract was at a premium of $25.25 to U.S. futures, compared with a record settlement of $26.21 on Aug. 19. Hurricane Irene The European benchmark’s premium to New York’s West Texas Intermediate crude shrank the most in five weeks on Aug. 22 after rebels in Libya entered Tripoli, paving the way for the country’s oil production to resume. The spread has since widened as Libyan leader Muammar Qaddafi eluded capture, stoking speculation a resumption in output may take longer than expected. Libya, a member of the Organization of Petroleum Exporting Countries, holds Africa’s largest crude reserves. Gasoline slipped as Hurricane Irene headed for the coast of North Carolina. The fuel for September delivery in New York fell 0.2 percent today after climbing 8.95 cents, or 3.1 percent, to $2.9679 yesterday. Irene, a Category 3 hurricane, was 420 miles (675 kilometers) south-southwest of Cape Hatteras, the U.S. National Hurricane Center said in an advisory at 5 a.m. Miami time today. The storm is expected to strike North Carolina tonight as it moves up the East Coast. Governors from North Carolina to Connecticut issued emergency declarations. Economic Growth The U.S. East Coast has 10 operating oil refineries with a capacity of 1.21 million barrels a day, according to the Energy Department. The area accounts for 7.1 percent of total U.S. operating capacity. “It will be bullish on the one hand, but demand has to be there,” Hewson said. “If you cut your growth forecast, you really have to ask yourself whether demand is there.” U.S. gross domestic product expanded at a 1.1 percent annual pace in the second quarter, down from the 1.3 percent that the government estimated last month, according to the median estimate of 81 economists surveyed by Bloomberg News. Crude may drop next week as Libyan rebels consolidate their hold on the country and begin taking steps to restore crude exports, based on a separate Bloomberg News poll. Seventeen of 34 analysts and traders, or 50 percent, forecast oil will decline through Sept. 2, the survey showed. Nine respondents, or 26 percent, predicted prices will increase and eight estimated there will be little change during the period. Last week, 42 percent of survey respondents projected oil will fall. Deutsche Bank AG cut its price forecasts for West Texas Intermediate and Brent crude oil for 2011. New York futures will average $94.25 a barrel this year, down from a previous estimate of $100, the bank said in an e-mailed report today. It reduced its estimate for Brent to $112 a barrel from $114. To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Sherry Su in London at lsu23@bloomberg.net To contact the editors responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net; Stephen Voss at sev@bloomberg.net

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