Crude oil prices, on Wednesday, declined for the first time in seven days, as a surge in the European Central Bank’s balance sheet to a record high highlighted the growing risks of the region’s debt crisis.

Crude oil for February delivery declined $1.68, or 1.7 per cent, to $99.66 a barrel at 11:48 a.m. on the New York Mercantile Exchange. Earlier, prices touched $99.11 a barrel. Futures have climbed 9.1 per cent this year, extending last year’s advance of 15 per cent.

Brent oil for February settlement fell $1.87, or 1.7 per cent, to $107.40 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to New York crude was $7.74 a barrel, down from on Tuesday’s close, which was the smallest differential based on settlement price since January 20.

Futures dropped as much as 2.2 per cent after the ECB lent financial institutions more money last week in an attempt to keep credits flowing. The euro tumbled to the lowest level since January against the dollar, curbing investor demand for commodities. Oil also decreased on reduced concern that Iran will block the Strait of Hormuz.

“The biggest news right now is that the euro is coming in pretty strongly,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. in New York. “It was time for a correction after rising for six days.”

New York oil prices surged 1.7 per cent to $101.34 on Tuesday, the highest settlement since November 16, during a period of slow trading. Volume was 167,547 on December 23, the lowest level since December 26, 2008, and down 73 per cent from the average of the past three months. Open interest was 1.31 million contracts.

“The significant rally on Tuesday was probably exaggerated because of low volume,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

Lending to euro-area banks jumped 214 billion euros ($280 billion) to 879 billion euros in the week ended December 23, the Frankfurt-based ECB said in a statement yesterday. Its balance sheet increased 239 billion euros to 2.73 trillion euros, it said.

The 17-nation currency fell against the dollar as concern increased that the region’s sovereign-debt crisis will reduce economic growth in the region. The euro decreased as much as 1.2 per cent to $1.2916. The Standard & Poor’s 500 Index declined 1.2 per cent to 1,250.20.

“We’re trying to balance the bullish and bearish influences in the market,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “All of the commentary about Iran has been supportive while the macroeconomic picture, as expressed by the S&P 500, is negative.”

About 15.5 million barrels of oil a day, or a sixth of global consumption, pass through the Strait of Hormuz between Iran and Oman at the mouth of the Persian Gulf, according to the U.S. Energy Department. Iran’s navy started a 10-day exercise east of the passage that involved the use of submarines, ground- to-sea missile systems and torpedoes, Press TV said December 24.

The U.S. won’t tolerate a disruption to shipping in the Strait of Hormuz, Rebecca Rebarich, a Navy spokeswoman, said in an e-mail.

“It’s important to remember that there’s a very low probability that Iran would attempt to block the Strait of Hormuz,” Evans said.