Oil declined from a four-month high as the International Monetary Fund cut its global growth forecasts and on speculation that U.S. inventories increased.

Prices dropped for the first time in five days as the dollar strengthened against the euro after the IMF projected a second year of contraction in the euro region.

The world economy will expand 3.5 percent this year, less than the 3.6 percent forecast in October, the Washington-based IMF said today in an update of its World Economic Outlook report. It expects the 17-country euro area to shrink 0.2 percent in 2013, instead of growing 0.2 percent as forecast in October, as Spain leads the contraction and Germany slows.

Stockpiles probably increased 2 million barrels last week after production reached a 20-year high, a Bloomberg survey showed.

West Texas Intermediate crude for March delivery fell to $96.20 a barrel on the New York Mercantile Exchange.

Brent for March settlement climbed 20 cents to $112.62 a barrel on the London-based ICE Futures Europe exchange. 

Gold futures declined as the U.S. House of Representatives plans a vote today to temporarily suspend the nation’s borrowing limit and amid concern that demand is slowing in India, the world’s biggest consumer.

The House is expected to pass legislation that would suspend the government’s $16.4 trillion debt limit until May 19. At that point, the U.S. borrowing authority would be automatically increased to accommodate the amount the Treasury borrows. Bullion demand from India may be “muted” in the next few days as buyers wait for clarity on details related to this week’s import-tax increase, UBS AG said today.

Since 1960, Congress has raised or revised the debt limit 79 times, including 49 times under Republican presidents, according to the Treasury Department. Lawmakers have until March 1 before automatic spending reductions will start and until the end of that month to pass a bill to fund the government.

India raised import duties on gold and platinum to 6 percent from 4 percent.

Gold futures for February delivery fell to $1,683.10 an ounce on the Comex in New York, declining for the second time in three sessions.

Change % Change Last

Oil $96.13 -0.11 -0.11%