Crude oil fell in New York to below $85 a barrel on expectations that a U.S. government report today will show an increase in oil and gasoline stockpiles.

Oil inventories probably climbed 963,000 barrels last week and gasoline rose 475,000 barrels, according to the median of 16 responses in a Bloomberg News survey. Prices have fallen for four days straight, the longest consecutive decline since a six- day drop in May.

“We have had now a couple of increases in U.S. inventories in the past weeks and that’s taken a little of the pressure off in terms of how tight oil markets are,” said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.

Crude oil for December delivery fell as much as 59 cents, or 0.7 percent, to $84.68 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contract was at $84.91 at 12:21 p.m. in Singapore.

Yesterday, oil dropped 75 cents, or 0.9 percent, to $85.27. Prices are 43 percent higher than a year ago.

Analysts in the Bloomberg survey were split over whether supplies of distillate fuel, which includes heating oil and diesel, rose or declined. The U.S. Energy Department is scheduled to release its weekly report on inventories at 10:30 a.m. in Washington. Last week’s report showed a 1.78 million- barrel gain in crude stockpiles.

Brent crude oil for December settlement declined as much as 44 cents, or 0.5 percent, to $82.41 a barrel on the London-based ICE Futures Europe exchange. It was at $82.54 at 12:21 p.m. Singapore time.

Turkey-Iraq

Oil reached a record $90.07 a barrel in New York on Oct. 19 after the dollar fell against the euro and Turkish lawmakers voted to allow military strikes in Iraq against Kurdish militants. Iraq holds the world’s third-largest reserves of oil.

Prices also declined in the past three days on signs that Turkey may be prepared to use diplomatic measures rather than military strikes against the rebel groups, Commonwealth’s Moore said.

The U.S. is sharing intelligence with Turkey in its fight against Kurdish militants operating from bases in northern Iraq, White House officials said yesterday. The Bush administration is attempting to prevent the conflict between Turkey and the separatist Workers’ Party, or PKK, from widening and threatening Iraq’s stability.

“There are some signs also that the U.S. and Iraq are responding to the issue now, which may be seen as taking a bit of the heat out as far as Turkey is concerned,” Moore said.

Possible Slowdown

Concerns about a possible slowdown in U.S. economic growth and signs that the Organization of Petroleum Exporting Countries is increasing output are also dragging oil prices down from last week’s record, Investec Bank (Australia) Ltd. said today in a report.

OPEC, producer of about 40 percent of the world’s oil, last month agreed to boost production by 500,000 barrels a day starting Nov. 1. Shipments will rise 1.3 percent in the four weeks to Nov. 3 from the previous month, consulting company Oil Movements said in an Oct. 18 report.

Most U.S. companies foresee weaker second-half growth and a “substantial” slowdown in housing, the National Association for Business Economics said Oct. 22.

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