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Oil declined for a second day in New York amid signs supplies are rising in the U.S. and China, the world's biggest crude consumers, Bloomberg reported.

Futures slipped as much as 0.7 percent after falling 0.6 percent yesterday. U.S. crude stockpiles probably increased to the highest level in three months and production rose, according to a Bloomberg survey before an Energy Department report on Nov. 15. China's output climbed to a record in October, the China Federation of Logistics and Purchasing said today. Oil slid yesterday as investors awaited budget talks in the U.S., and extended losses after European leaders said they'll meet again Nov. 20 to discuss additional funding for Greece.

"Supplies are elevated," said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. "Although the data we've seen from China has confirmed that their economy has stabilized and in fact expanded at a greater rate, the questions that hang over Europe and the U.S. suggest that it's going to be difficult to get any significant moves going."

Crude for December delivery slid as much as 58 cents to $84.99 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.01 at 3:56 p.m. Sydney time. The contract fell 50 cents to $85.57 yesterday. Prices are down 14 percent this year.

Brent for December settlement declined 61 cents, or 0.6 percent, to $108.46 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $23.45 to West Texas Intermediate futures, down from $23.50 yesterday.

Crude output

U.S. crude inventories probably rose 2.5 million barrels to 377.3 million, according to the median estimate of seven analysts in the Bloomberg survey before the Energy Department report. Gasoline supplies climbed 800,000 barrels while distillate stockpiles declined 500,000 barrels, according to the survey. The inventory data will be released a day later than usual because of the Veterans Day holiday yesterday.

Crude output probably kept advancing after reaching 6.68 million barrels a day in the week ended Nov. 2, an 18-year high, the survey showed. U.S. oil production is poised to surpass Saudi Arabia's in the next decade, making the nation almost self-reliant and putting it on track to become a net exporter, the International Energy Agency said yesterday in its annual World Energy Outlook.

Growing supplies extracted through technology including hydraulic fracturing will transform the U.S. into the largest producer in about 2020, according to the Paris-based agency. The nation met 83 percent of its energy needs in the first six months of this year, Energy Department data show. Saudi Arabia will reclaim its position as top producer by 2030, the IEA estimated.

U.S., Europe

China's oil production in October rose 8.4 percent from a year earlier to 17.9 million metric tons, the Beijing-based logistics federation said in an e-mailed statement. The previous record was 17.8 million in January 2011.

President Barack Obama invited the top Democratic and Republican leaders in Congress to the White House this week to begin talks on a plan to avert the so-called fiscal cliff. If Congress doesn't act by the end of the year, $607 billion in automatic spending cuts and tax increases are scheduled to take effect starting in January.

European finance ministers meeting in Brussels yesterday put off until Nov. 20 a decision on how to cover additional Greek needs of as much as 32.6 billion euros ($41 billion) and left unclear whether the International Monetary Fund will continue to contribute. They granted the country a two-year extension to 2016 to cut its budget deficit to 2 percent of gross domestic product.

Japan economy

Oil extended its decline after a report signaled Japan's economy weakened in September. The nation's industrial production contracted 4.1 percent from the prior month, according to final data from the Ministry of Economy, Trade and Industry in Tokyo.

Crude imports by Japan's power utilities in October fell 4.5 percent from a month earlier to 1.12 million tons, a separate report by the Federation of Electric Power Cos. showed. The figure was up 18 percent from October 2011.

The Organization of Petroleum Exporting Countries is likely to keep its group production quota of 30 million barrels a day unchanged when OPEC oil ministers meet next month, Samba Financial Group (SAMBA) said in an e-mailed report. Saudi Arabia will curb its current "high" output to prevent market imbalances emerging, the Riyadh-based bank said.