Brent crude prices declined Monday, in London, as investors bet that Europe’s worsening debt crisis may slow the economy and crimp fuel demand. Futures in New York swung between gains and losses.

Brent oil for September settlement fell as much as 51 cents to $116.75 a barrel on the London-based ICE Futures Europe exchange, and was at $117.03 at 3:14 p.m. Sydney time. The contract dropped 0.4 per cent last week. Prices are 55 per cent higher the past year.

Crude for August delivery was at $97.22 a barrel, down two cents, in electronic trading on the New York Mercantile Exchange. Prices fluctuated on Monday, climbing as much as 0.5 per cent and slipping as much as 0.3 per cent. Futures increased 1.1 per cent last week and are 27 per cent higher the past year.

Brent slipped as much as 0.4 per cent before European leaders hold a special summit this week, after eight of the region’s banks failed stress tests.

Concerns that the crisis was spreading pushed the euro lower against the dollar, limiting the appeal of commodities priced in the U.S. currency. Tropical Storm Bret formed north of the Bahamas as the second cyclone of the Atlantic hurricane season.

“Our global view is that we’ve hit a temporary patch of weakness in demand growth and in the next few months we expect that to turn around, notwithstanding some sort of big financial event or some further blow-up of this sovereign debt situation,” said Ben Westmore, a minerals and energy economist at National Australia Bank Limited in Melbourne, who predicts oil in New York will average $113 a barrel in the third quarter.

Oil in New York swung between gains and losses yesterday following an “inside day” formation on its candlestick chart, a sign that investors are unsure where short-term prices are headed, according to data compiled by Bloomberg.

This occurred after futures on July 15 failed to exceed the previous day’s high and fell less than the low.

Net-long positions, or bets on rising prices, in crude oil advanced 2 per cent to 168,833 in the seven days ended July 12, according to the Commodity Futures Trading Commission’s Commitments of Traders report.

Oil in New York may continue to face technical resistance around $98 a barrel, near a one-year Fibonacci retracement level and the 50-day moving average, according to data compiled by Bloomberg. A breach of technical resistance usually means the market will advance further.

Brent’s losses outpaced U.S. futures yesterday, narrowing the difference between the front-month European benchmark contract and New York prices to a premium of $19.45 a barrel, compared with the record settlement of $22.63 on July 14.

Tropical storm Bret, located about 95 miles (150 kilometers) Northwest of Great Abaco Island, has sustained winds of almost 40 miles per hour with some higher gusts, the U.S. National Hurricane Center said in an advisory at 11 p.m. Miami time Monday. Force winds are extending outward up to 35 miles from the center, it said.

Alyeska Pipeline Service Co. restarted the Trans Alaska Pipeline yesterday after maintenance on two of the line’s pumping stations, Spokeswoman Michelle Egan said in an e-mail. The Anchorage, Alaska-based company halted operations south of Prudhoe Bay on July 16 to replace valves at Pump Station four and to straighten a pipe at Pump Station 11, the company said.