Feb. 5 (Bloomberg) -- Crude oil fell to trade around $89 a barrel in New York on speculation a government report tomorrow will show U.S. supplies rose for a fourth week as refiners shut plants for maintenance before summer.

Inventories in the world's largest oil consumer probably gained 2.2 million barrels last week as refining rates dropped to a 22-month low, according to a Bloomberg survey of 11 analysts. U.S. share prices fell yesterday for the first time in three days after analysts warned a recession may increase loan defaults for banks and finance houses.

``Demand should slip further in the U.S., where the economy continues to look rough,'' said Rob Laughlin, a senior broker at MF Global Ltd. in London. ``Oil is taking direction from weaker equities in Asia and a lower close on Wall Street last night.''

Crude oil for March delivery fell as much as $1, or 1.1 percent, to $88.88 a barrel in electronic trading on the New York Mercantile Exchange. It was at $89.25 at 1:40 p.m. in London.

Brent crude for March settlement fell as much as $1.29, or 1.4 percent, to $89.18 a barrel on London's ICE Futures Europe exchange. It was at $89.55 at 1:41 p.m. London time.

``It's not that long before we'll be going into the seasonal low period for oil demand,'' said David Moore, the commodity strategist at Commonwealth Bank of Australia Ltd. ``That, combined with uncertainty about the U.S. economy, is probably limiting the upside'' for oil prices, he said.

Houston Channel

The Houston Ship Channel, which serves the largest U.S. petroleum port, was closed to tanker traffic and other vessels because of fog. Traffic was halted at 6:10 p.m. local time on Feb. 3, reopened around midday Feb. 4, and shut again yesterday at 4 p.m., a Houston Pilots Association dispatcher said by telephone.

StatoilHydro ASA, Norway's biggest oil producer, resumed oil and gas production at its Njord A field in the Norwegian Sea today after a fire in a gas turbine yesterday halted output. The Njord field produces 20,000 barrels of oil a day and exports 6 million standard cubic meters of gas a day.

New York oil futures reached a record $100.09 a barrel on Jan. 3. Prices have dropped 10 percent since as U.S. oil and gasoline stockpiles rose and global equity markets weakened.

The Energy Department's weekly inventory report will probably show gasoline stockpiles gained 1.7 million barrels, according to the analyst survey, the 13th weekly increase.

The Organization of Petroleum Exporting Countries last week left its production target unchanged, citing the prospect of slowing global demand growth and rising oil and fuel stockpiles.

The group, which is forecasting a 1.5 million-barrel-a-day reduction in demand in the second quarter, will review production again on March 5.

For a third day, the New York crude oil futures contract closest to delivery is less expensive than the price of some contracts for later delivery. This pattern, which arose Feb. 1 for the first time since December, encourages companies to build up stockpiles.

The spread between March and April contracts was at 3 cents a barrel at 11:04 a.m. in London.

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net

Last Updated: February 5, 2008 08:54 EST