Crude Oil Fall Today in New York, Future Oil Price Drop as Consumer Generally

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Crude oil fall in New York as European leaders considered unleashing 940 billion euros ($1.3 trillion) to tame the debt crisis, and France and Germany asked officials to agree on plans next week.

Futures fell 0.9 percent as two people familiar with the matter said Europe may combine temporary and permanent rescue funds to deploy as much as 940 billion euros. Oil pared losses after German Chancellor Angela Merkel and French President Nicolas Sarkozy said in a joint statement they want governments to agree on a “comprehensive and ambitious” plan by Oct. 26.

“The oil market is being driven by sentiment over the European debt crisis,” said David Greely, head of energy research at Goldman Sachs Group Inc. in New York. “The failure to have a resolution and the uncertainty that’s brought is having a major impact on the market.”

Crude oil for November delivery declined 81 cents to settle at $85.30 a barrel on the New York Mercantile Exchange. November futures expired today. December oil, the most-actively traded contract, dropped 22 cents to $86.07.

Brent oil for December settlement rose $1.37, or 1.3 percent, to end the session at $109.76 a barrel on the London- based ICE Futures Europe exchange. The spread between the December Brent and Nymex crude contracts widened to $23.69 from $22.10 yesterday.

Negotiations over pairing the temporary and permanent funds as of mid-2012 accelerated this week after efforts to leverage the temporary fund ran into European Central Bank opposition and provoked a clash between Germany and France, said the two people, who decline to be identified because a decision rests with political leaders.

Crude oil rose for the first time in three days on hopes that European leaders will reach a deal to contain the region’s debt crisis.

Futures gained 1.6 percent as European finance ministers met in Brussels today to lay the groundwork for an Oct. 23 gathering of government leaders on a solution to the debt crisis. Oil also rose after McDonald’s Corp. (MCD) and Honeywell International Inc. (HON) reported profits that beat analyst estimates.

“There is some positive sentiment that Europe is going to be able to accomplish something this weekend,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Earnings reports suggested that the U.S. economy doesn’t seem to be slowing down considerably.”

Crude for December delivery rose $1.33 to settle at $87.40 a barrel on the New York Mercantile Exchange. Oil gained 0.7 percent this week, the third weekly increase in a row.

Brent oil for December settlement fell 25 cents, or 0.2 percent, to $109.51 a barrel on the London-based ICE Futures Europe exchange. The North Sea crude’s premium to the U.S. benchmark narrowed to $22.11 amid speculation that Muammar Qaddafi’s death will increase Libyan output. The spread reached a record of $27.88 on Oct. 14.

European finance ministers started a six-day negotiation over how to save Greece from default, shield banks from the fallout and build more powerful defenses against the debt crisis. As much as 940 billion euros ($1.3 trillion) might be deployed, two people familiar with the discussions said yesterday.