By Grant Smith and Alexander Kwiatkowski Nov. 3 (Bloomberg) -- Crude oil fell in New York before a report forecast to show that crude-oil inventories increased for a fourth week. The industry-funded American Petroleum Institute publishes its weekly inventory figures today. Tomorrow’s U.S. Department of Energy report may show crude stockpiles rose 1.5 million barrels last week from 339.9 million the prior week, according to a Bloomberg survey. Prices also fell as the dollar gained against the euro, reducing commodities’ appeal for investors. “The conditions are there for a slide back to $75,” said Rob Montefusco, a broker at Sucden Financial in London. “Demand for products is still weak, while the stronger dollar and worries about the financial sector are weighing on sentiment.” Crude oil for December delivery fell as much as $1.10, or 1.4 percent, to $77.03 a barrel and was at $77.08 a barrel on the New York Mercantile Exchange at 10:05 a.m. London time. Crude has risen 75 percent this year. The contract yesterday gained $1.13, or 1.5 percent, to settle at $78.13 a barrel after the Institute for Supply Management said its U.S. factory index rose to a three-year high in October. The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. All 10 analysts surveyed by Bloomberg forecast a gain in crude stockpiles. U.S. supplies of distillate fuel, a category that includes heating oil and diesel, declined 850,000 barrels last week from 167.8 million the prior week, according to the survey. Stockpiles in the week ended Oct. 2 were at the highest level since January 1983. Refineries operated at 82.1 percent of capacity, up 0.3 percentage point from the previous week. ‘Fits and Starts’ Brent crude for December settlement fell as much as $1.01, or 1.3 percent, to $75.54 a barrel and was at $75.58 a barrel on the London-based ICE Futures Europe exchange at 10:06 a.m. local time. The contract yesterday climbed $1.35, or 1.8 percent, to $76.55 a barrel. “Despite its fits and starts, the dollar is in the throes of a mini-correction that could see it strengthen somewhat further from here and likely exert continued downward pressure on energy,” Edward Meir, an analyst with MF Global Ltd. in Darien, Connecticut, said in a report today. The U.S. currency traded at $1.4646 against the euro, the strongest in four weeks. It was at $1.4658 per euro at 10:11 a.m. in London, from $1.4775 yesterday. To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.netAlexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net

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