Crude oil prices fell below $80 a barrel for a third day on concern that a meeting of European Union leaders this week will fail to check the region’s debt crisis, leading to a reduction in fuel demand.

Oil for August delivery declined 92 cents, or 1.2 percent, to $78.84 a barrel at 2:10 p.m. on the New York Mercantile Exchange. Futures are down 20 percent this year. Prices have fallen 23 percent since the end of March, heading for the biggest quarterly decline since the final three months of 2008.

Brent oil for August settlement slid 33 cents, or 0.4 percent, to $90.65 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate, the grade traded in New York, was at $11.81, up from $11.22 on June 22.

Futures dropped as much as 2.2 percent as George Soros warned that a failure by EU leaders to produce drastic measures could spell the demise of the bloc’s shared currency. Crude climbed earlier as oil and gas installations in the Gulf of Mexico were shut because of Tropical Storm Debby. Prices slid as the storm moved toward Florida and away from energy fields.

“The market is hanging on every development out of the euro zone,” said John Kilduff, a partner at Again Capital LLC, a New York-based energy hedge fund. “Things don’t look promising for the summit. Nothing appears to be in the cards that will end the crisis and an ultimate breakdown looks likely.”

The drop in oil prices eased as gasoline futures surged on speculation that refinery closures in North America and Europe may make summer-blend gasoline inventories tight along the U.S. East Coast. Gasoline for July delivery gained 6.25 cents, or 2.4 percent, to $2.6324 a gallon in New York.

The contract is heading for the biggest gain since March 1.

Policy makers should create a European Fiscal Authority to purchase sovereign debt in return for Italy and Spain implementing achievable budget cuts, Soros said in an interview in London yesterday. The billionaire investor said German Chancellor Angela Merkel is worsening Europe’s crisis because countries need growth, not the austerity she has called for.

Merkel, speaking to a conference in Berlin today, dismissed “euro bonds, euro bills and European deposit insurance with joint liability and much more” as “economically wrong and counterproductive,” saying that they violate the German constitution.

The EU begins a two-day meeting June 28 in Brussels. Leaders will attend pre-summit gatherings as they work to narrow differences on solutions to the debt crisis.

“We’re focused on Europe’s economic outlook,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The movement in oil matches what’s happening with the equity market and the euro is soft. This is all consistent with a broad risk-off trade.”

The euro touched $1.2471, the lowest level against the dollar since June 12. A weaker euro and stronger dollar curb commodities’ appeal as an alternate investment. The Standard & Poor’s 500 Index (SPX) declined 1.6 percent and the Dow Jones Industrial Average decreased 1.1 percent at 2:11 p.m.

“The main driver of this market remains concern about the European crisis and what that may mean for oil demand,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The tropical storm gave us a boost earlier but is now moving in the wrong direction.”

Oil gave up earlier gains after Tropical Storm Debby shifted away from offshore energy installations. Debby was in the Gulf of Mexico, about 75 miles (125 kilometers) south of Apalachicola, Florida, with top winds of 45 miles per hour, the National Hurricane Center said in an advisory at 11 a.m. New York time.