Oil down from three-week high

Oil slid from the highest level in almost three weeks amid signs of slowing economic growth in China and concern that Europe's bailout plan will falter.

Futures fell as much as 0.4 per cent in New York, dropping for the first time in five days.

China, the world's second biggest oil user after the US, reported vehicle sales that missed analysts' estimates.

A court ruling is due in Germany on the country's participation in the euro-area fund for fighting the region's debt crisis.

The US Federal Reserve starts a two-day meeting tomorrow where it may announce measures to boost the economy amid slowing jobs growth.

"The market is waiting on the two big news events in the German court decision and whether or not the Fed does something," said Ric Spooner, a chief market analyst at CMC Markets in Sydney.

"At best, I think with oil we're looking at a fairly gradual expansion in demand against a backdrop of fairly well-covered supply."

Crude for October delivery decreased as much as 40 cents to $96.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.31 at 12.44 pm Singapore time.

The contract yesterday rose 12 cents to $96.54, the highest close since August 22. Prices are 2.5 per cent lower this year.

Brent oil for October settlement fell 7 cents to $114.74 a barrel on the London-based ICE Futures Europe exchange.

The European benchmark grade's premium to West Texas Intermediate was at $18.42, from $18.27 yesterday.

Brent, a benchmark grade for more than half of the world's oil, has risen 29 per cent since this year's lowest close on June 21, as a European Union embargo on crude purchases from Iran took full effect on July 1.

Global supply, demand and inventories of crude don't justify the increase in prices, Saudi Arabian oil minister Ali al-Naimi said yesterday, according to the official Saudi Press Agency. The kingdom is the world's largest crude exporter.

China's wholesale deliveries of passenger vehicles gained 11 per cent to 1.22 million units last month, the China Association of Automobile Manufacturers said in a statement today.

Bloomberg