By Grant Smith Sept. 25 (Bloomberg) -- Oil fell for a third day after U.S. durable goods orders unexpectedly declined, signaling the economic recovery may be weaker than anticipated. Crude is heading for its biggest weekly drop since July after losing 9.2 percent in three days. U.S. inventories of heating oil and other distillate fuels are at their highest in 26 years. Orders for goods meant to last several years dropped 2.4 percent, the worst performance since January, the Commerce Department said today in Washington. “The disappointing durable goods report pushed up risk aversion, resulting in a rise in the U.S. dollar and a fall in oil prices,” said Mike Wittner, head of oil market research at Societe Generale SA in London. Crude for November delivery fell as much as 84 cents, or 1.3 percent to $65.05 a barrel, on the New York Mercantile Exchange, its lowest since July 31. It traded for $65.24 as of 1:41 p.m. London time. Brent crude on the ICE Futures Europe exchange was down 59 cents at $64.23 Goldman Sachs Group Inc. raised its 2010 global crude oil demand forecast by 1.9 percent on forecasts that an economic expansion has begun, bolstering fuel consumption. Global crude use next year will average 86.405 million barrels a day, up 1.6 million barrels from Goldman’s previous outlook, analysts led by Jeffrey Currie said in a report today. The bank raised its forecast for daily oil demand in this year’s fourth quarter by 1.2 million barrels to 85.106 million barrels. A tropical wave 325 miles west of the Cape Verde islands off Africa has a “medium chance,” or 30 to 50 percent, of becoming a cyclone within 48 hours, the U.S. National Hurricane Center said.

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