Oil declined in New York on concern that Greece will fail to take sufficient steps to avert a default, threatening Europe’s economy and fuel consumption.

Futures dropped as much as 1.5 percent before a deadline for Greece to accept terms demanded by international lenders on a bailout package. Brent oil in London traded at the biggest premium to the American benchmark grade in 12 weeks as record- low temperatures in Europe bolstered fuel demand.

Greek Prime Minister Lucas Papademos struck a tentative deal with party leaders to extend spending cuts after euro-area finance chiefs told them an increase in the 130 billion-euro ($170 billion) aid package wasn’t forthcoming.

The economic expansion in China, the world’s biggest energy-consuming country, could be cut almost in half this year if Europe’s debt crisis worsens, the International Monetary Fund said. Crude oil for March delivery fell to $96.38 a barrel on the New York Mercantile Exchange. Prices are down 2 percent this year. Brent oil for March settlement gained 87 cents, or 0.8 percent, to $115.45 a barrel on the ICE Futures Europe exchange.